Economic freedom and veto players jointly affect entrepreneurship

Economic freedom and veto players jointly affect entrepreneurship PurposeThe purpose of this paper is to explore how the strength of political veto players affects the long-run credibility of economic institutions and how they jointly affect entrepreneurial activity.Design/methodology/approachThe authors employ an annual panel covering 30 OECD countries from 1993 to 2011.FindingsAn error correction model identifies a positive and significant short-run effect on self-employment from large government spending at low levels of veto player strength. A static model conversely indicates that smaller government spending is positively associated with entrepreneurship at lower levels of veto player strength in the long run.Originality/valueThe authors are the first to explore the interaction of economic and political institutions in the development of entrepreneurship. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Enterpreneurship and Public Policy Emerald Publishing

Economic freedom and veto players jointly affect entrepreneurship

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2045-2101
DOI
10.1108/JEPP-D-17-00007
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to explore how the strength of political veto players affects the long-run credibility of economic institutions and how they jointly affect entrepreneurial activity.Design/methodology/approachThe authors employ an annual panel covering 30 OECD countries from 1993 to 2011.FindingsAn error correction model identifies a positive and significant short-run effect on self-employment from large government spending at low levels of veto player strength. A static model conversely indicates that smaller government spending is positively associated with entrepreneurship at lower levels of veto player strength in the long run.Originality/valueThe authors are the first to explore the interaction of economic and political institutions in the development of entrepreneurship.

Journal

Journal of Enterpreneurship and Public PolicyEmerald Publishing

Published: Nov 6, 2017

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