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Journal of Development Economics

Entrepreneurship Policy and Globalization

Scientific Article in English
Reference
Norbäck, Pehr-Johan, Lars Persson and Robin Douhan (2014). “Entrepreneurship Policy and Globalization”. Journal of Development Economics 110, 22–38. doi.org/10.1016/j.jdeveco.2014.04.006

Authors
Pehr-Johan Norbäck, Lars Persson, Robin Douhan

What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy in the form of entry costs in a lobbying model taking into account the conflict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies, since it is then (i) more difficult to protect domestic incumbents and (ii) pro-entrepreneurial policies make foreign entrepreneurs less aggressive. Using the World Bank Doing Business database, we find evidence that international openness is negatively correlated with the barriers to entry for new entrepreneurs, as predicted by the theory.

Pehr-Johan Norbäck

+46 (0)8 665 4522
+46 (0)73 574 3379
pehr-johan.norback@ifn.se