Book chapter
Economic freedom and formal entrepreneurial activity: A longitudinal analysis between the period 2013 -2018
Fecha
2022Registro en:
Autor
Díaz Tautiva, Julián
Montúfar Romero, Milton Gabriel
Rifo Rivera, Felipe
Barragán, Camila
Institución
Resumen
Given the lack of empirical consensus on the relationship between formal
market-oriented institution and entrepreneurial activity, our research aimed to explore the
relationship between formal entrepreneurship and overall economic freedom. To do so,
we have generated balanced panel data based on the intersection of available information
from the Fraser Institute Freedom Index, The World Bank entrepreneurship survey, and
The World Bank macroeconomic indicators. The final sample included information of
107 countries over six years, 2013 to 2018. We modelled the data with a fixed effect and
panel-corrected standard errors method with country dummy variables. Our results
suggest a negative and significant relationship between (first difference) formal
entrepreneurial activity and (lagged) overall economic freedom. Besides, we found that
(first difference) unemployment rate, (first difference and log) total population and (first
difference) working-age population had a negative and statistically significant
relationship with (first difference) formal entrepreneurial activity. Based on these results,
we provided an analysis considering the nature of the entrepreneurial endeavours and
suggested further research avenues.