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http://ssrn.com/abstract=1347269
 
 

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Where Does Regulation Hurt? Evidence from New Businesses Across Countries


Silvia Ardagna


National Bureau of Economic Research (NBER); Goldman Sachs - London

Annamaria Lusardi


The George Washington University School of Business; National Bureau of Economic Research (NBER)

February 2009

NBER Working Paper No. w14747

Abstract:     
We use two micro data sets that collect harmonized data across countries to investigate the effects of regulation on new businesses. We are able to distinguish between two types of entrepreneurs: those who start a business to pursue a business opportunity and those who start a business because they could not find better work. Irrespective of the measure of regulation we use, we always find a detrimental effect of regulation on entrepreneurship. While women are overall less likely to start new businesses, in more regulated countries women are pulled into entrepreneurship not to pursue a business opportunity but because they could not find better work. Moreover, regulation dampens the effects of self-assessed business skills and social networks. In more regulated economies, those with better business skills and those who know other entrepreneurs are less likely to become entrepreneurs to pursue a business opportunity. Tighter regulation also exacerbates fear of failure, further discouraging business start-up. All our estimates point to a negative effect of regulation.

Number of Pages in PDF File: 49

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Date posted: February 21, 2009  

Suggested Citation

Ardagna, Silvia and Lusardi, Annamaria, Where Does Regulation Hurt? Evidence from New Businesses Across Countries (February 2009). NBER Working Paper No. w14747. Available at SSRN: http://ssrn.com/abstract=1347269

Contact Information

Silvia Ardagna (Contact Author)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Goldman Sachs - London ( email )
130 Peterborough Court
133 Fleet Street
London, EC4A 2BB
United Kingdom
Annamaria Lusardi
The George Washington University School of Business ( email )
School of Business and Public Management
Washington, DC 20052
United States
HOME PAGE: http://business.gwu.edu/faculty/annamaria_lusardi.cfm
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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