How economic freedom affects opportunity and necessity entrepreneurship in the OECD countries

Angulo-Guerrero, Maria Jose; Pérez‐Moreno, Salvador; Abad-Guerero, Isabel María

doi:10.1016/j.jbusres.2016.11.017

Cited by 168 publications

(120 citation statements)

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“…In addition, we contribute to the knowledge-spillover theory of entrepreneurship and institutional theory by examining the moderating effects of "areas of government intervention" on the relation between different types of knowledge (e.g., scientific knowledge, technological knowledge) and innovative nascent entrepreneurship. In fact, this study uses the Economic Freedom Index 1 from the Fraser Institute as a moderator, which measures reductions in government intervention (Angulo-Guerrero et al, 2017;Kuckertz et al, 2016;Nyström, 2008). We showed that different degrees and kinds of government activity are required for each entrepreneurial source (scientific knowledge and technological knowledge) to result in innovative nascent entrepreneurship.…”

Section: Introductionmentioning

confidence: 94%

A cross-national study of knowledge, government intervention, and innovative nascent entrepreneurship

Yoon

Kim

Buisson³

et al. 2018

Journal of Business Research

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Which kind of government intervention is needed to transform scientific and technological knowledge into innovative nascent entrepreneurship? We answer this question by drawing upon the knowledge spillover theory of entrepreneurship and institutional theory. We empirically examined the moderating effect of government intervention on the relation between knowledge and innovative nascent entrepreneurship with crosscountry panel data on 47 countries from 2002 to 2012. Our results first show that a smaller government sector is required to transform technological knowledge into innovative nascent entrepreneurship. In addition, we found that a larger government sector and more regulation of credit, labor, and business increase the transformation of scientific knowledge into innovative nascent entrepreneurship. We contribute to understanding the role of government in transforming scientific and technological knowledge into innovative nascent entrepreneurship.

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Section: Introductionmentioning

confidence: 94%

A cross-national study of knowledge, government intervention, and innovative nascent entrepreneurship

Yoon

Kim

Buisson³

et al. 2018

Journal of Business Research

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“…Economic dimensions, compromising legal structures, government, property rights, labour, financial structures and business environments, may affect intentions to enter self-employment. Several studies have revealed an association between economic freedom and entrepreneurial activity [40,41]. It can be argued that greater economic freedom offers greater opportunities and higher rewards for creating a new venture.…”

Section: Spatial Context and Institutional Factorsmentioning

confidence: 99%

Paving the Way for Self-Employment: Does Society Matter?

Parastuty

Bögenhold

2019

Sustainability

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This paper empirically investigates the extent to which institutional and individual factors predict the level of intention relating to self-employment. Arriving at a better understanding of intentions will assist to provide answers as to why ratios of self-employment are as they are and how public and economic policy may respond to an often perceived requirement to increase the level of self-employment. Using the dataset of 2017 Amway Global Entrepreneurship Research (AGER) for Austria, the United Kingdom, Italy, the United States, and Brazil this study finds that all variables predicting the intention to enter self-employment are significant at varying degree. The research explores the interplay between age, risk, gender, and education, on the one hand, and unemployment (OECD Labour Force Statistics) and political constitution as measured by the EFW index, on the other hand. Distinguishing between “no intention”, an “indifferent intention,” and a “strong intention” towards self-employment, the findings show that all variables can predict a willingness for self-employment in different, but significant, ways to comparable measures (an indifferent intention relative to no intention, and a strong intention to no intention). The paper concludes with an outlook to some more general perspectives of institutional economics and needs for further research.

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“…It would be very interesting to know how different elements of economic freedom facilitates the conversion of latent entrepreneurs into active business owners. Moreover, according to the literature (Angulo-Guerrero et al, 2017;Van Stel et al, 2007) the relationship between economic freedom and opportunity and necessity based entrepreneurial activities are quite different. Arguing in the same line, it would be very helpful to differentiate the effect of economic freedom on opportunity and necessity based entrepreneurial intentions.…”

Section: Resultsmentioning

confidence: 99%

“…According to the Business and Industry Advisory Committee to the Organization for In summary, there is a clear gap in the literature regarding a comprehensive examination of the effects of economic freedom on entrepreneurial activity. The few studies that do look into the matter use data that are either for a single year or for a limited set of countries (Sobel et al, 2007;Nyström, 2008;Bjørnskov and Foss, 2010;Angulo-Guerrero et al, 2017;Carlos Díaz-Casero et al, 2012).…”

Section: Regulation and Entrepreneurial Intentionmentioning

confidence: 99%

“…Cooperation and Development (OECD), "Policies to foster entrepreneurship are essential to job creation and economic growth. "Only a handful of studies have looked at the linkage between economic freedom and entrepreneurship(Nyström, 2008;Bjørnskov and Foss, 2010;Angulo-Guerrero et al, 2017;Carlos Díaz-Casero et al, 2012) Bjørnskov and Foss (2010). made a concerted effort to explain cross-country differences in entrepreneurship with the help of changes in economic policies and institutional framework.…”

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confidence: 99%

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Studies on Entrepreneurship, Regulation and Economic Freedom

Ghosh¹

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Studies on Entrepreneurship, Regulation and Economic Freedom Sriparna Ghosh This dissertation is a collection of empirical essays studying the effects of institutional qualities on firm dynamics and latent entrepreneurship. After providing an overview of the dissertation in Chapter 1, in Chapter 2 I analyze the effect of industry level federal regulations on firm decisions to exit the market. The idea is to test whether stricter regulation results in reduced competitiveness for smaller firms relative to larger firms. Using data from the Kauffman Firm Survey and RegData, I find that the effect of regulation on firm exit varies based on firm size. My findings are in congruence with the predictions of regulator models where regulation acts as a fixed cost on all firms, leading to a reduction in small firms relative to large firms. In Chapter 3, I look at the effect of economic freedom on entrepreneurial intention. While a number of studies have looked at the effect of economic freedom on entrepreneurship, none have looked at how economic freedom influences the intention to engage in entrepreneurship. Using panel data on a wide variety of countries, I investigate the effects of economic freedom, especially regulation, on entrepreneurial intention. My findings suggest that stricter credit market regulation reduces entrepreneurial intention whereas more stringent labor regulations restricts job availability and thereby encourages more people to take up entrepreneurship as a career choice. Chapter 4 is an addition to the literature on economic freedom and economic growth. It has been well-established that economic freedom is associated with good economic outcomes. Economic freedom, however, is comprised of numerous dimensions. The marginal benefit to improving policy in one area can be expected to depend on the amount of freedom in the other dimensions. Thus, which policy improvement is most impactful depends on the entire menu of current policies and, therefore, differ between states. In Chapter 4, Bryan McCannon and I explore how economic freedom measurements can be used to guide policy. We propose a method for creating a growth-enhancing economic freedom index, which allows for nonlinearities and interaction effects between the components to economic freedom. We use this method to illustrate that U.S. states differ in which policy area generates the greatest gains. To validate our method, we apply our index to state bond markets. If our measurement is useful, then it should correlate with bond ratings. Consistent with this hypothesis, we find that state bond ratings are strongly correlated with our growth-enhancing economic freedom index. iii Dedication This dissertation is dedicated to my parents, Dr. Apurba Kumar Ghosh and Ashoka Ghosh and my grandmother Shefali Ghosh, who are my pillars of support.

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How economic freedom affects opportunity and necessity entrepreneurship in the OECD countries

Cited by 168 publications

References 21 publications

A cross-national study of knowledge, government intervention, and innovative nascent entrepreneurship

A cross-national study of knowledge, government intervention, and innovative nascent entrepreneurship

Paving the Way for Self-Employment: Does Society Matter?

Studies on Entrepreneurship, Regulation and Economic Freedom

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