Abstract

http://ssrn.com/abstract=1697250
 
 

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Regulatory Burden, Rule of Law, and Entry of Strategic Entrepreneurs: An International Panel Study


Jonathan Levie


University of Strathclyde - Strathclyde Business School

Erkko Autio


Imperial College Business School; Aalto University, Department of Industrial Engineering and Management

August 16, 2010

Journal of Management Studies, Forthcoming

Abstract:     
Entry into entrepreneurship is a strategic act for individuals who seek an optimal way to exploit their human, social and financial capital. Trade-offs associated with this choice are influenced by institutional conditions. We use signaling theory, employment choice theory and theory on strategic entry to develop hypotheses on the effect of business regulations and rule of law on strategic and non-strategic entrepreneurial entry. Analysing a six-year panel of 54 countries, we find lighter burden of regulation associated with a higher rate and relative prevalence of strategic entrepreneurial entry. Rule of law moderates this effect such that regulation has a significant effect on strategic entry only when rule of law is strong. These findings are robust against alternative proxies. Implications are drawn for prospective entrepreneurs, existing organisations, policy, and further research.

Number of Pages in PDF File: 55

Keywords: Entrepreneurship, regulation, rule of law, signalling, employment choice, strategy

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Date posted: October 25, 2010  

Suggested Citation

Levie, Jonathan and Autio, Erkko, Regulatory Burden, Rule of Law, and Entry of Strategic Entrepreneurs: An International Panel Study (August 16, 2010). Journal of Management Studies, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1697250

Contact Information

Jonathan Levie
University of Strathclyde - Strathclyde Business School ( email )
100 Cathedral Street
Glasgow G1 1XU
United Kingdom
Erkko Autio (Contact Author)
Imperial College Business School ( email )
South Kensington Campus
Exhibition Road
London SW7 2AZ, DC SW7 2AZ
United Kingdom
+447786226452 (Phone)
HOME PAGE: http://www3.imperial.ac.uk/people/e.autio
Aalto University, Department of Industrial Engineering and Management ( email )
Rakentajanaukio 2
Espoo, FI-00076
Finland
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