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Regulatory burden, rule of law, and entry of strategic entrepreneurs : an international panel study

Levie, Jonathan and Autio, Erkko (2011) Regulatory burden, rule of law, and entry of strategic entrepreneurs : an international panel study. Journal of Management Studies, 48 (6). pp. 1392-1419. ISSN 0022-2380

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Abstract

Entry into entrepreneurship is a strategic act for individuals who seek an optimal way to exploit their human, social and financial capital. Trade-offs associated with this choice are influenced by institutional conditions. We use signalling theory, employment choice theory and theory on strategic entry to develop hypotheses on the effect of business regulations and rule of law on strategic and non-strategic entrepreneurial entry. Analysing a six-year panel of 54 countries, we find lighter burden of regulation associated with a higher rate and relative prevalence of strategic entrepreneurial entry. Rule of law moderates this effect such that regulation has a significant effect on strategic entry only when rule of law is strong. These findings are robust against alternative proxies. Implications are drawn for prospective entrepreneurs, existing organisations, policy, and further research.

Item type: Article
ID code: 28409
Notes: Accepted for publication in Special Issue “Revitalizing Entrepreneurship” October 2010
Keywords: Entrepreneurship, regulation, rule of law, signalling, employment choice, strategy, Commerce, Business and International Management, Strategy and Management, Management of Technology and Innovation
Subjects: Social Sciences > Commerce
Department: Strathclyde Business School > Hunter Centre For Entrepreneurship
Depositing user: Miss Carol Ann Balloch
Date Deposited: 19 Oct 2010 14:04
Last modified: 04 Sep 2015 04:05
URI: http://strathprints.strath.ac.uk/id/eprint/28409

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