Do more heavily regulated economies have poorer performing new ventures? Evidence from Britain and Spain

By Joan‐Lluís Capelleras, K. Mole, F. Greene, D. Storey. 2008

165 citations recorded by the source corpus.

We test two alternative perspectives on the start-up size and subsequent growth of new firms in a heavily regulated (HR) economy and a lightly regulated (LR) economy. The first argues that, in an HR economy, there will be fewer new firms, and those that do start will be larger than those in an LR economy, but they will grow more slowly. A second perspective is that regulation does not influence the scale of entrepreneurship – merely its distribution between that which is registered and that which is not registered. Using parallel datasets for HR Spain and LR Britain we find some support for both perspectives. Specifically we find that registered new firms in Britain do start smaller than in Spain and do grow faster. However, when both registered and unregistered firms are included, these differences disappear.

Subfields: Accounting, Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/8f69f1968f703958c0284ff87c5c885c1374a2d1

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Citations in the corpus

Institutions, Entrepreneurship, and Economic Growth: What Do We Know and What Do We Still Need to Know? (2016, unknown): “, job creation, firm growth, innovative entry, innovation activity, and productivity advances) (Arzeni, 1997; Baptista, Escária, & Madruga, 2008; Capelleras et al. 2007; Erken,Donselaar, &Thurik, 2008; Klein&Luu, 2003).”
Burden or benefit? Regulation as a dynamic influence on small business performance (2015, background): “…labour market regulation), are associated with macro-level economic indicators such as business entry rates, productivity and growth (e.g. Caballero et al., 2013; Capelleras et al., 2008; Djankov, 2009; Frontier Economics, 2012; Jalilian et al., 2007; Klapper et al., 2006; van Stel et al., 2007).”
Entrepreneurship and public policy (2009, unknown): “Capelleras et al. (2008) find support for this idea.”
Institutional Theory and Contextual Embeddedness of Women's Entrepreneurial Leadership: Evidence from 92 Countries (2015, unknown): “Capelleras et al. (2008) showed that heavily regulated countries will have fewer new firms and they will grow more slowly.”
Economic and political institutions and entry into formal and informal entrepreneurship (2014, unknown): “Even these have been limited to single-country settings or two- country comparisons at most (Capelleras et al., 2008).”
The Effect of Business Regulations on Nascent and Young Business Entrepreneurship (2007, background): “17 The call for measuring formal and informal entrepreneurship separately is also supported by observations made by Capelleras et al. (2005). They argue that regulation does not affect entrepreneurship but merely influences the nature or form of that entrepreneurship.”