Economic freedom and entrepreneurial activity: Some cross-country evidence

By Christian Bjørnskov, N. J. Foss. 2008

495 citations recorded by the source corpus.

Abstract While much attention has been devoted to analyzing how the institutional framework and entrepreneurship impact growth, how economic policy and institutional design affect entrepreneurship appears to be much less analyzed. We try to explain cross-country differences in the level of entrepreneurship by differences in economic policy and institutional design. Specifically, we use the Economic Freedom Index from the Fraser Institute to ask which elements of economic policy making and the institutional framework are conducive to the supply of entrepreneurship, measured by data on entrepreneurship from the Global Entrepreneurship Monitor. We find that the size of government is negatively correlated and sound money is positively correlated with entrepreneurial activity. Other measures of economic freedom are not significantly correlated with entrepreneurship.

Subfields: Economics and Econometrics, Information Systems, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/efa5d63cf8352febb117e31c112ef43f66461ece

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Citations in the corpus

Dependent self-employment as a way to evade employment protection legislation (2011, background): “Finally, Bjørnskov and Foss (2008) do not find any significant result for GEM countries.”
Opportunity Versus Necessity Entrepreneurship: Two Components of Business Creation (2018, unknown): “Congregado et al. (2012) and Fritsch et al. (2015) report evidence of overall counter-cyclical entrepreneurship rates in Spain and Germany. 2 A large number of recent papers mention the distinction, see for example Wennekers et al. (2005), Bergmann and Sternberg (2007), Ho and Wong (2007), Van Stel ”
The institutions of economic freedom and entrepreneurship: evidence from panel data (2008, background): “Storey and Thurik (2006) and Bjornskov and Foss (2007) use data from the previously”
Institutions, entrepreneurship, and economic growth in Europe (2018, background): “Financial stability (Opportunity) TEA Bjørnskov and Foss (2010)”
Regulating away competition: the effect of regulation on entrepreneurship and employment (2017, unknown): “In the same issue of Public Choice and also using the economic freedom index to measure institutional quality, Bjørnskov and Foss (2008) find that the size of government is negatively correlated with entrepreneurial activity as measured by survey data from the Global Entrepreneurship Monitor Consort”
Institutions, Entrepreneurship, and Economic Growth: What Do We Know and What Do We Still Need to Know? (2016, unknown): “And yet, there is surprisingly little work that systematically links the antecedents of entrepreneurship, entrepreneurial activity itself, and the aggregate consequences thereof in a unified framework (Bjørnskov & Foss, 2008, 2013; Holcombe, 1998).”
Greasing the wheels of entrepreneurship (2007, background): “sectional analysis in Bjornskov and Foss (2006) shows that the size of the government”
Does corruption ever help entrepreneurship? (2016, unknown): “Studies like Bjørnskov and Foss (2008) have shown that certain indicators of economic freedom affect entrepreneurial initiatives of nation.”
Greasing the wheels? The impact of regulations and corruption on firm entry (2011, unknown): “2004; Bjørnskov and Foss 2008; Wennekers et al. 2007). Van Stel et al. (2003), however, find nascent entrepreneurship to be more prevalent as the square of per capita GDP rises, suggesting a u-shaped relationship. The u-shaped impact of per capita GDP on entrepreneurship is confirmed in Verheul et a”
Cross‐Country Determinants of Early‐Stage Necessity and Opportunity‐Motivated Entrepreneurship: Accounting for Model Uncertainty (2018, unknown): “…are also concerns that looking at total rates of entrepreneurship or selfemployment, as is common in the comparative entrepreneurship literature (Bjørnskov and Foss 2010), can lead to misleading conclusions by erroneously implying that low levels of economic development, inefficient law…”