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Article Dans Une Revue Small Business Economics Année : 2023

Entry-regulation and corruption: grease or sand in the wheels of entrepreneurship? Fresh evidence according to entrepreneurial motives

Résumé

Plain English Summary Corruption and regulation can have ambiguous relationships with entrepreneurship unless you take a careful look at it. We examine the impact of corruption and entry-regulation on opportunity and necessity-motivated entrepreneurship within different economic development contexts. Corruption and entry-regulation correlate negatively with entrepreneurship but might have a tempering effect on each other. Thus, we consider whether corruption reduces the negative impact of entry-regulation on entrepreneurship while remaining globally negative (i.e., the “weak view”) or if it completely counterbalance the negative effect (the “strong view”). Exploiting a cross-country dataset on 105 countries over the 2003–2016 period, we find that, while corruption might somewhat temper the negative impact of a heavy administrative machinery in developing countries, this tempering effect of corruption will generally be non-significant. Furthermore, our findings suggest that corruption deters opportunity-motivated entrepreneurship—the type of entrepreneurship that may contribute the most to productivity, economic growth and development. Corruption and regulation would then be particularly harmful for economic development. The policy-maker tackling these issues would do well to consider direct effects and possible interrelationships according to context.
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Dates et versions

hal-04531948 , version 1 (04-04-2024)

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Marcus Dejardin, Hélène Laurent. Entry-regulation and corruption: grease or sand in the wheels of entrepreneurship? Fresh evidence according to entrepreneurial motives. Small Business Economics, 2023, 62 (3), pp.1223-1272. ⟨10.1007/s11187-023-00802-1⟩. ⟨hal-04531948⟩
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