Title: Where does regulation hurt?
Description: "We use two micro data sets that collect harmonized data across countries to investigate the effects of regulation on new businesses.  We are able to distinguish between two types of entrepreneurs: those who start a business to pursue a business opportunity and those who start a business because they could not find better work.  Irrespective of the measure of regulation we use, we always find a detrimental effect of regulation on entrepreneurship.  While women are overall less likely to start new businesses, in more regulated countries women are pulled into entrepreneurship not to pursue a business opportunity but because they could not find better work.  Moreover, regulation dampens the effects of self-assessed business skills and social networks.  In more regulated economies, those with better business skills and those who know other entrepreneurs are less likely to become entrepreneurs to pursue a business opportunity.  Tighter regulation also exacerbates fear of failure, further discouraging business start-up.  All our estimates point to a negative effect of regulation"--National Bureau of Economic Research web site.
Subjects: New business enterprises, Trade regulation