This paper studies the association between the effectiveness of insolvency regulations and entrepreneurship using multilevel modeling of about 300,000 individuals in 27 countries over the 2005-2010 period. We investigate the relationship between three different measures of Bresolving insolvency^(time, cost, and recovery rate) from the World Bank and four different measures of entrepreneurship from the Global Entrepreneurship Monitor, controlling for relevant individualand country-level facets. We find that opportunitydriven and innovation-oriented entrepreneurs are more severely affected by onerous insolvency regulations than necessity-motivated entrepreneurs. However, entrepreneurs envisioning rapid employment growth are not affected by onerous insolvency regulations. We discuss contributions to comparative entrepreneurship research and public policy.
In this paper, we investigate the impact on firms of the value added tax (VAT) reform that took effect in Sweden on 1 January 2012 for restaurant and catering services. Unlike previous research, we use a synthetic control group approach to construct our counterfactual. Our analysis shows that the VAT reduction had a positive effect on turnover, total wages, employment, profit margins, and net entry of firms. The effects of the reform tend to decrease over time. In all, the results point to an overall better performance for the restaurant industry compared with what it would have been in absence of the reform.
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