The Impact of Higher Quality Government Regulation of Business and Greater Economic Freedom on Living Standards: Evidence from OECD Nations

Journal of Entrepreneurship and Public Policy, Vol. 5 Iss: 1, pp.82 - 94

Posted: 25 May 2016

See all articles by Richard J. Cebula

Richard J. Cebula

Armstrong Atlantic State University; Jacksonville University (Florida)

Fabrizio Rossi

University of Cassino and Southern Lazio

J. R. Clark

The University of Tennessee at Chattanooga

Date Written: May 20, 2016

Abstract

Purpose – The purpose of this paper is to evaluate whether two specific forms of government policy influence entrepreneurship and hence the performance economy as a whole. Performance is measured in terms of living standards and growth therein. The policies are, as follows: higher quality government regulation of businesses and higher levels of economic freedom.

Design/methodology/approach – The paper first provides a basic model focussing upon the regulation and economic freedom variables. The study then adds a dummy variable for G8 nations, a tax burden variable, and the long-term interest rate and provides six estimates. The empirical analysis involves pooled time-series/cross-section data for the OECD over the period 2003-2007.

Findings – The findings indicate that for OECD nations, higher quality public regulation promotes entrepreneurial spirit and performance. Higher economic freedom does the same. The findings are that higher quality government regulation of business and higher levels of economic freedom lead to higher growth rates in the standard of living.

Originality/value – The time period studied, i.e., just prior to the Great Recession, the context of the OECD, the adoption of pooled time-series/cross-section data, and the specific choice of variables in the analysis, along with the estimation of possibly unique or close to unique specifications involving the growth rate of living standards per se make this study different.

Keywords: Entrepreneurial opportunity, Economic freedom, Regulatory policy

JEL Classification: G30, G38, E02, E43, H22, H26

Suggested Citation

Cebula, Richard J. and Rossi, Fabrizio and Clark, Jeff R., The Impact of Higher Quality Government Regulation of Business and Greater Economic Freedom on Living Standards: Evidence from OECD Nations (May 20, 2016). Journal of Entrepreneurship and Public Policy, Vol. 5 Iss: 1, pp.82 - 94. Available at SSRN: https://ssrn.com/abstract=2782688

Richard J. Cebula

Armstrong Atlantic State University ( email )

11935 Abercorn Street
Savannah, GA 31419
912-921-3781 (Phone)
912-921-3782 (Fax)

Jacksonville University (Florida) ( email )

Jacksonville, FL 32211
United States

Fabrizio Rossi (Contact Author)

University of Cassino and Southern Lazio ( email )

Via G. Di Biasio, 43
Cassino, Frosinone 03043
Italy

Jeff R. Clark

The University of Tennessee at Chattanooga ( email )

Department of Economics
Suite 313 Fletcher Hall
Chattanooga, TN 37403-2598
United States

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