Immediate and Delayed Effect of Governance in Entrepreneurship: an Analysis by Country Income Level
Keywords:
Governance, entrepreneurship, panel data, delays, income level
Abstract
Entrepreneurship and business creation is a priority area for many governments worldwide. Public administration can help to promote entrepreneurship through its decisions and the definition and implementation of public policies. This study analyzes the effect of six dimensions of quality of governance in business creation. We used panel data for a sample of 206 countries over the period of 2004 to 2014, divided into four subsamples generated from the income level of the countries. Furthermore, the study adopted a dual perspective, considering both immediate effects and delayed effects, resulting in two research hypotheses. The results show that for high-income countries, the political stability and absence of violence variable is significant. Adopting two-year lags in the statistical model resulted in a greater number of statistically significant explanatory variables. No homogeneous pattern is observed in the variables for statistical significance regarding the four income levels. This finding implies that the focus on good governance should primarily be regarded as a long-term perspective, rather than in terms of short cycles or simply electoral cycles.Downloads
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References
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Grosanu, A., Bota-Avram, C., Rachisan, P., Vesselinov, R., & Tiron-Tudor, A. (2015). The influence of country-level governance on business environment and entrepreneurship: A global perspective. Amfiteatru Economic, 17(38), 60–75.
Gugler, P., & Chaisse, J. (2009) Competitiveness of ASEAN Countries: Corporate and Regulatory Drivers. Cheltenham: Edward Elgar, New Horizon in International Business Series.
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Naudé, W. (2010). Entrepreneurship, developing countries, and development economics: new approaches and insights. Small Business Economics, 34, 1–12.
Ong, K. (2006). Enabling effective governance in ASEAN community. CAPAM 2006 Biennial Conference, Sydney, 23 October, 2006. http://www.asean.org/resources/
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Salimath, M., & Cullen, J. (2010). Formal and informal institutional effects on entrepreneurship: A synthesis of nation-level research. International Journal of Organizational Analysis, 18, 358–385.
Thai, M., & Turkina, E. (2014). Macro-level determinants of formal entrepreneurship versus informal entrepreneurship. Journal of Business Venturing, 29, 490–510.
Thornton, P., Ribeiro-Soriano, D., & Urbano, D. (2011). Socio-cultural and entrepreneurial activity: An overview. International Journal of Small Business, 29(2), 105–118.
Wennekers, S., Uhlaner, L., & Thurik, R. (2002). Entrepreneurship and its conditions: A macro perspective. International Journal of Entrepreneurship Education, 1, 25–68.
World Bank (2013). What is governance? Retrieved from http://web.worldbank.org /WBSITE/EXTERNAL/COUNTRIES/MENAEXT/ EXTMNAREGTOPGOVERNANCE/0,,contentMDK:20513159~pagePK:34004173~piPK:34003707~theSitePK:497024,00.html
Acs, J., Desai, S. & Klapper, F. (2008b). What does entrepreneurship data really show? Small Business Economy, 31, 265–281. http://dx.doi.org/10.1007/s11187-008-9137-7
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.
Álvarez, C., Urbano, D., Coduras, A., & Ruiz, J. (2011). Environmental conditions and entrepreneurial activity: A regional comparison in Spain. Journal of Small Business and Enterprise Development, 18(1), 120–140.
Amorós, J., & Bosma, N. (2013). Global Entrepreneurship Monitor: 2013 Global Report. Global Entrepreneurship Research Association.
Amorós, J., & Masferrer, M. (2010). Dynamics of entrepreneurship and quality of government institutions: An evaluation using cross-country data. Fourth GEM Research Conference, October, 2010.
Anokhin, S., Grichnik, D., & Hisrich, R. (2008). The journey from novice to serial entrepreneurship in China and Germany: Are the drivers the same? Managing Global Transitions, 6, 117–142.
Bettignies, J., & Brander, A. (2007). Financing entrepreneurship: Bank finance versus venture capital. Journal of Business Venturing, 26, 808–832.
Bjørnskov, C., & Foss, N. (2008). Economic freedom and entrepreneurial activity: Some cross-country evidence. Public Choice, 134, 307–328. http://dx.doi.org/10.1007/s11127-007-9229-y
Dau, L., & Cuervo-Cazurra, A. (2014). To formalize or not to formalize: Entrepreneurship and pro-market institutions. Journal of Business Venturing, 29(5), 668–686.
Dreher, A., & Schneider, F. (2010) Corruption and the shadow economy: An empirical analysis. Public Choice, 144, 215–238. http://dx.doi.org/10.1007/s11127-009-9513-0
Gedeon, S. (2010). What is entrepreneurship? Entrepreneurial Practice Review, 1, 16–35.
Grosanu, A., Bota-Avram, C., Rachisan, P., Vesselinov, R., & Tiron-Tudor, A. (2015). The influence of country-level governance on business environment and entrepreneurship: A global perspective. Amfiteatru Economic, 17(38), 60–75.
Gugler, P., & Chaisse, J. (2009) Competitiveness of ASEAN Countries: Corporate and Regulatory Drivers. Cheltenham: Edward Elgar, New Horizon in International Business Series.
Kaufmann, D., & Kraay, A. (2003). Governance and growth: Causality which way? Evidence for the world. Washington, DC: World Bank Institute.
Kaufmann D., Kraay, A., & Mastruzzi M. (2006). Governance Matters V: Governance indicators for 1996–2005. Washington DC: World Bank.
Kaufmann, D., Kraay, A., & Matruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues. World Bank Policy Research Working Paper No. 5430.
Klapper, L., & Love, I. (2010). The impact of the financial crisis on new firm registration. Washington, DC: World Bank.
Klapper L., Laeven L., & Rajan, R. (2006). Entry regulation as a barrier to entrepreneurship. Journal of Financial Economics, 82(3), 591–629.
Klapper L., Amit, R., Guillén, F., & Quesada, J. (2007). Entrepreneurship and firm formation across countries. Research Working Paper No. 4313. Washington DC: World Bank.
McMillan, J., & Woodruff, C. (2002). The central role of entrepreneurs in transition economies. Journal of Economic Perspectives, 16, 153–170. http://dx.doi.org/10.1257/089533002760278767
Minniti, M., & Levesque, M. (2008). Recent developments in the economics of entrepreneurship. Journal of Business Venturing, 23, 603–612.
Naudé, W. (2010). Entrepreneurship, developing countries, and development economics: new approaches and insights. Small Business Economics, 34, 1–12.
Ong, K. (2006). Enabling effective governance in ASEAN community. CAPAM 2006 Biennial Conference, Sydney, 23 October, 2006. http://www.asean.org/resources/
Rose-Ackerman, S. (2004). The challenge of poor governance and corruption. Copenhagen Consensus Challenge Paper. Copenhagenconcensus.com.
Salimath, M., & Cullen, J. (2010). Formal and informal institutional effects on entrepreneurship: A synthesis of nation-level research. International Journal of Organizational Analysis, 18, 358–385.
Thai, M., & Turkina, E. (2014). Macro-level determinants of formal entrepreneurship versus informal entrepreneurship. Journal of Business Venturing, 29, 490–510.
Thornton, P., Ribeiro-Soriano, D., & Urbano, D. (2011). Socio-cultural and entrepreneurial activity: An overview. International Journal of Small Business, 29(2), 105–118.
Wennekers, S., Uhlaner, L., & Thurik, R. (2002). Entrepreneurship and its conditions: A macro perspective. International Journal of Entrepreneurship Education, 1, 25–68.
World Bank (2013). What is governance? Retrieved from http://web.worldbank.org /WBSITE/EXTERNAL/COUNTRIES/MENAEXT/ EXTMNAREGTOPGOVERNANCE/0,,contentMDK:20513159~pagePK:34004173~piPK:34003707~theSitePK:497024,00.html
How to Cite
Rodríguez-Gulías, M. J., de Sousa Gabriel, V. M., & Rodeiro-Pazos, D. (1). Immediate and Delayed Effect of Governance in Entrepreneurship: an Analysis by Country Income Level. Journal of Business, Universidad Del Pacífico (Lima, Peru), 9(1), 83-98. https://doi.org/https://doi.org/10.21678/jb.2017.825
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