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Working Paper No. 807

Entrepreneurship Policy and Globalization

Working Paper
Douhan, Robin, Pehr-Johan Norbäck and Lars Persson (2009). “Entrepreneurship Policy and Globalization”. IFN Working Paper No. 807. Stockholm: Research Institute of Industrial Economics (IFN).

Robin Douhan, Pehr-Johan Norbäck, Lars Persson

What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy 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

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