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Research on Entrepreneurship & Firm Performance

Doing Business considers the following list of papers as relevant for research on entrepreneurship. Some papers—denoted with an asterisk (*)—use Doing Business data for their empirical analysis. If we've missed any important research, please let us know.

Author(s): Lerner, Josh; Tag, Joacim

Journal: Industrial and Corporate Change, Volume 22, Issue 1, Pages 153-182, February 2013

Abstract: We survey the literature on venture capital and institutions and present a case study comparing the development of the venture capital market in the United States and Sweden. Our literature survey underscores that the legal environment, financial market development, the tax system, labor market regulations, and public spending on research and development correlate with venture capital activities across countries. Our case study suggests these institutional differences led to the later development of an active venture capital market in Sweden compared with the United States. In particular, a later development of financial markets and a heavier tax burden for entrepreneurs have played a key role.

Author(s): Silvia Ardagna and Annamaria Lusardi

Journal: Harvard University; Dartmouth College, Harvard Business School and NBER, 2008

Abstract: We use a micro dataset that collects information across individuals, countries, and time to investigate the determinants of entrepreneurial activity in thirty-seven developed and developing nations. We focus both on individual characteristics and on countries’ regulatory differences. We show that individual characteristics, such as gender, age, and status in the workforce are important determinants of entrepreneurship, and we also highlight the relevance of social networks, self-assessed skills, and attitudes toward risk. Moreover, we find that regulation plays a critical role, particularly for those individuals who become entrepreneurs to pursue a business opportunity. The individual characteristics that are impacted most by regulation are those measuring working status, social network, business skills, and attitudes toward risk.

Author(s): Aidis, Ruta; Estrin, Saul; Mickiewicz, Tomasz Marek

Journal: Small Business Economics, Volume 39, Issue 1, Pages 119-139, July 2012

Abstract: We explore the country-specific institutional characteristics likely to influence an individual's decision to become an entrepreneur. We focus on the size of the government, on freedom from corruption and on "market freedom" defined as a cluster of variables related to protection of property rights and regulation. We test these relationships by combining country-level institutional indicators for 47 countries with working-age population survey data taken from the Global Entrepreneurship Monitor. Our results indicate that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption. A cluster of institutional indicators representing "market freedom" is only significant in some specifications. Freedom from corruption is significantly related to entrepreneurial entry, especially when the richest countries are removed from the sample, but unlike the size of government, the results on corruption are not confirmed by country-level fixed-effects models.

Author(s): John McMillan and Christopher Woodruff

Journal: Journal of Economic Perspectives—Volume 16, Number 3—Summer 2002—Pages 153–170

Abstract: New firms have been formed at a striking rate in the transition countries, improving welfare by creating jobs, supplying consumer goods, constraining the market power of the state-owned firms, and building political momentum for reform. We summarize evidence on the relative role of entrepreneurs and the state in economic reform. Early in the transition, the government's main contribution to entrepreneurship was to avoid impeding the entrepreneurs' self help. Later, the entrepreneurs came to need positive assistance from the state: institutions to support contracting and finance.

Author(s): André Stel, David Storey and A. Thurik

Journal: Small Business Economics, Springer 28(2):171-186, 2007

Abstract: We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. (2002) between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering.

Author(s): Thomas Holmes

Journal: Journal of Political Economy 106 (4): 667–705, 1998

Abstract: This paper provides new evidence that state policies play a role in the location of industry. The paper classifies a state as pro-business if it has a right to work law and anti-business if it does not. The paper finds that, on average, there is a large, abrupt increase in manufacturing activity when one crosses a state border from an anti-business state into a pro-business state.

Author(s): Leora Klapper and Inessa Love

Journal: World Bank Policy Research Working Paper 5493

Abstract: This paper uses panel data on the number of new firm registrations in 92 countries to study how the ease of registering a business and the magnitude of registration reforms affect new firm registrations. We find that the costs, days and procedures required for starting a business are important predictors of new firm registration. These results can be helpful to motivate policymakers to make larger, broader reforms.

Author(s): Leora Klapper and Inessa Love

Journal: Economic Letters [lead article]

Abstract: Panel data for 93 countries shows that most countries experienced a sharp drop in new firm registration during the financial crisis. The decline was more pronounced in countries with higher levels of financial development that were more affected by the crisis.