29 Pages Posted: 29 Oct 2011
Date Written: October 28, 2011
This research investigates the relationship between public policy and firm deaths in the U.S. States. Policies that promote firm births may increase or decrease firm deaths. We use components of the Economic Freedom of North America index (EFNA) as a metric to evaluate the relationship between increased government size and firm deaths for the 50 states during 1989-2004. Elements of the EFNA are significantly related to firm deaths, but in conflicting directions. We find that over the relevant range, some changes in state policy lead to firm death more than others. The paper also discusses our results and the implications for both future academic research and public policy.
Suggested Citation: Suggested Citation
Campbell, Noel D. and Heriot, Kirk C. and Jauregui, Andres and Mitchell, David T., Which State Policies Lead to U.S. Firm Exits? Analysis with the Economic Freedom Index (October 28, 2011). Available at SSRN: https://ssrn.com/abstract=1950834 or http://dx.doi.org/10.2139/ssrn.1950834