Business Perceptions of the New French Regime on Auto-Entrepreneurship: A Risk-Taking Step Back from Socialism

Abstract:     
France has a rather low rate of enterprise creation. Institutional analysis helps to explain why this is so. Nevertheless, in the last few years since 2003, France has been modernizing its legal framework to stimulate enterprise creation and this has achieved some success. A new regime of Auto-entrepreneur has recently been introduced in early 2009 as a new start up mechanism, creating a lot of buzz. This paper presents the new French regime and its accountancy and tax inputs, explaining the economic motivations of the new institution and its limitations. The paper presents results of a questionnaire administered to CEO's of small business enterprises on their perceptions of this regime. The research indicates that the entrepreneurship law is perceived to be risky for tax and social security revenues, lack of entrepreneurial capabilities, lack of social security net for failed entrepreneurs, and increased competition for small enterprises from their own employees. Future directions for research are indicated in entrepreneurship and microfinance, business regulation and globalization.

Number of Pages in PDF File: 16

Keywords: Entrepreneurship, microenterprise, microcredit, French law, socialism, capitalism, regulatory analysis

JEL Classification: G38, K20, K34, M13, P00, P10, P11, P12, P16, P20, P26

Accepted Paper Series