TY  - JOUR
AU  - Ardagna,Silvia
AU  - Lusardi,Annamaria
TI  - Where does regulation hurt? Evidence from new businesses across countries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14747
PY  - 2009
Y2  - February 2009
UR  - http://www.nber.org/papers/w14747
L1  - http://www.nber.org/papers/w14747.pdf
N1  - Author contact info:
Silvia Ardagna
Senior Economist
BofA Merrill Lynch
2 King Edward Street
London EC1A 1HQ
Tel: +44 20 79961512
E-Mail: silvia.ardagna@baml.com

Annamaria Lusardi
The George Washington University
School of Business
2201 G Street, NW
Duques Hall, Suite 450E
Washington, DC 20052
Tel: 202-994-8410
E-Mail: alusardi@gwu.edu
AB  - 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.
ER  -