One Size Fits All? The Differential Impact of Federal Regulation on Early-Stage Entrepreneurial Activity Across US States.

33 Pages Posted: 20 Jan 2023

See all articles by John A. Dove

John A. Dove

Troy University -- Department of Economics, Finance, & RMI

Date Written: January 2023

Abstract

Numerous studies evaluate how a jurisdiction’s institutional and specifically regulatory environment impact firm formation and entrepreneurial activity. This study adds to this by employing a dataset measuring the differential impact that federal regulations have on industries across US states. Specifically, the paper addresses how such differences affect several facets of early-stage entrepreneurial activity, including an index measure of early-stage entrepreneurship, opportunity entrepreneurship, job creation at startup, and new firm survival rates all derived from the Kauffman Index of Entrepreneurial Activity. Overall, the results suggest that early-stage entrepreneurial activity tends to be negatively correlated with a relatively more burdensome federal regulatory environment. While the channels do not indicate an effect through new firm formation or firm survival rates, both opportunity entrepreneurship and job formation are negatively and significantly affected. Implications are discussed.

Keywords: Regulation, Entrepreneurship, Firm Formation, Job Creation, Early-Stage Entrepreneurship

JEL Classification: D78, H73, K20, L26, L51

Suggested Citation

Dove, John A., One Size Fits All? The Differential Impact of Federal Regulation on Early-Stage Entrepreneurial Activity Across US States. (January 2023). Available at SSRN: https://ssrn.com/abstract=4328801 or http://dx.doi.org/10.2139/ssrn.4328801

John A. Dove (Contact Author)

Troy University -- Department of Economics, Finance, & RMI ( email )

137I John Robert Lewis Hall
Troy, AL 36082
United States

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