Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35677
Authors: 
Aidis, Ruta
Estrin, Saul
Mickiewicz, Tomasz
Year of Publication: 
2009
Series/Report no.: 
IZA discussion papers 4123
Abstract: 
In this paper we explore the relationship between the individual decision to become an entrepreneur and the institutional context. We pinpoint the critical roles of property rights and the size of the state sector for entrepreneurial activity and test the relationships empirically by combining country-level institutional indicators for 44 countries with working age population survey data taken from the Global Enterprise Monitor. A methodological contribution is the use of factor analysis to reduce the statistical problems with the array of highly collinear institutional indicators. We find that the key institutional features that enhance entrepreneurial activity are indeed the rule of law and limits to the state sector. However, these results are sensitive to the level of development.
Subjects: 
Entrepreneurship
property rights
access to finance
JEL: 
L26
P14
P51
P37
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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