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.
Journal of Development Economics
Entrepreneurship Policy and Globalization
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