{"title":"Barriers to entry, entrepreneurship and income inequality within the USA","authors":"Colin O’Reilly","doi":"10.1108/jepp-06-2022-0069","DOIUrl":null,"url":null,"abstract":"PurposeCross-country studies have shown that higher costs to starting a business tend to reduce entrepreneurship (Chambers and Munemo, 2019) and that an unfavorable environment for business can increase poverty and income inequality (Chambers et al., 2019a; Djankov et al., 2018). Building on the current literature, the authors test whether barriers to starting a business at the state and city level in the USA are associated with changes in entrepreneurship and income inequality.Design/methodology/approachMeasures of entrepreneurship (establishment entry rate and exit rate) are regressed on measures of barriers to entry in a cross-section of 50 states as well as a cross-section of 73 cities in the USA. Further, the authors regress measures of income inequality on measures of barriers to entry using the same two cross-sections. State level data on barriers to entry are from Teague (2016), published in the Journal of Entrepreneurship and Public Policy. City level data on barriers to starting a business are from the Doing Business in North America (DBNA) dataset.FindingsResults show that there is a negative and significant association between barriers to starting a business and the rate of firm exit. A standard deviation increase in barriers to entry is associated with a five percent decrease in the firm exit rate at the state level. The authors find only limited evidence that barriers to entry are associated with income inequality.Originality/valueDespite a large volume of scholarship on how regulation and barriers to entry influence entrepreneurship, no study (to the authors’ knowledge) has investigated how general entry regulation affects the entry or exit rate of establishments at the state or municipal level in the USA.","PeriodicalId":44503,"journal":{"name":"Journal of Entrepreneurship and Public Policy","volume":null,"pages":null},"PeriodicalIF":1.5000,"publicationDate":"2022-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Entrepreneurship and Public Policy","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jepp-06-2022-0069","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
PurposeCross-country studies have shown that higher costs to starting a business tend to reduce entrepreneurship (Chambers and Munemo, 2019) and that an unfavorable environment for business can increase poverty and income inequality (Chambers et al., 2019a; Djankov et al., 2018). Building on the current literature, the authors test whether barriers to starting a business at the state and city level in the USA are associated with changes in entrepreneurship and income inequality.Design/methodology/approachMeasures of entrepreneurship (establishment entry rate and exit rate) are regressed on measures of barriers to entry in a cross-section of 50 states as well as a cross-section of 73 cities in the USA. Further, the authors regress measures of income inequality on measures of barriers to entry using the same two cross-sections. State level data on barriers to entry are from Teague (2016), published in the Journal of Entrepreneurship and Public Policy. City level data on barriers to starting a business are from the Doing Business in North America (DBNA) dataset.FindingsResults show that there is a negative and significant association between barriers to starting a business and the rate of firm exit. A standard deviation increase in barriers to entry is associated with a five percent decrease in the firm exit rate at the state level. The authors find only limited evidence that barriers to entry are associated with income inequality.Originality/valueDespite a large volume of scholarship on how regulation and barriers to entry influence entrepreneurship, no study (to the authors’ knowledge) has investigated how general entry regulation affects the entry or exit rate of establishments at the state or municipal level in the USA.
期刊介绍:
Institutions – especially public policies – are a significant determinant of economic outcomes; entrepreneurship and enterprise development are often the channel by which public policies affect economic outcomes, and by which outcomes feed back to the policy process. The Journal of Entrepreneurship & Public Policy (JEPP) was created to encourage and disseminate quality research about these vital relationships. The ultimate aim is to improve the quality of the political discourse about entrepreneurship and development policies. JEPP publishes two issues per year and welcomes: Empirically oriented academic papers and accepts a wide variety of empirical evidence. Generally, the journal considers any analysis based on real-world circumstances and conditions that can change behaviour, legislation, or outcomes, Conceptual or theoretical papers that indicate a direction for future research, or otherwise advance the field of study, A limited number of carefully and accurately executed replication studies, Book reviews. In general, JEPP seeks high-quality articles that say something interesting about the relationships among public policy and entrepreneurship, entrepreneurship and economic development, or all three areas. Scope/Coverage: Entrepreneurship, Public policy, Public policies and behaviour of economic agents, Interjurisdictional differentials and their effects, Law and entrepreneurship, New firms; startups, Microeconomic analyses of economic development, Development planning and policy, Innovation and invention: processes and incentives, Regional economic activity: growth, development, and changes, Regional development policy.