Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319206 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11838
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper assesses the impact of the regulatory environment on the new business creation in 45 Least Developed Countries (LDC) using a panel data from 2000 to 2021. Empirical evidence, derived from a fixed effects (FE) model, indicates a strong relationship between business regulation and new business creation in LDC. This suggests that the regulatory framework of a country is a crucial factor that influences entrepreneurial decisions and can significantly contribute to economic growth. The overall economic situation of a country also has a positive and significant impact. Additionally, factors such as accessibility to financial services, political stability, control of corruption, and economic freedom clearly affect the establishment of new businesses in these countries. Similar results are obtained using the Generalised Method of Moments (GMM) estimator, through the use of a dynamic panel data approach. Finally, business regulation is also strongly associated with new business creation in OECD countries.
Subjects: 
new business
regulatory environment
FE
GMM
panel data
LDC.
JEL: 
M20
G18
C23
Document Type: 
Working Paper
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