2017

Economic Freedom and Veto Players Jointly Affect Entrepreneurship

Reprint No. 2017:63

Author(s): Christian Bjørnskov and Jacob LihnYear: 2017 Title: Journal of Entrepreneurship and Public Policy Volume (No.): 6 (3) Pages: 340–358
Online article (restrictions may apply)

Economic Freedom and Veto Players Jointly Affect Entrepreneurship Christian Bjørnskov and Jacob Lihn


Purpose – The purpose of this paper is to explore how the strength of political veto players affects the long-run credibility of economic institutions and how they jointly affect entrepreneurial activity.

Design/methodology/approach – The authors employ an annual panel covering 30 OECD countries from 1993 to 2011.

Findings – An error correction model identifies a positive and significant short-run effect on self-employment from large government spending at low levels of veto player strength. A static model conversely indicates that smaller government spending is positively associated with entrepreneurship at lower levels of veto player strength in the long run.

Originality/value – The authors are the first to explore the interaction of economic and political institutions in the development of entrepreneurship.


Reference:
Bjørnskov, Christian and Jacob Lihn (2017), "Economic Freedom and Veto Players Jointly Affect Entrepreneurship". Journal of Entrepreneurship and Public Policy 6(3), 340–358.

Christian Bjørnskov

Contact

Ph: +45 87 16 48 19
Mob: +45 20 12 03 84
chbj@econ.au.dk

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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