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Explanatory factors of business creation in ten European countries: A proposal from the institutional perspective

Abstract:

This paper aims to analyze the phenomenon of the entrepreneurship in ten countries of the European Union during the period 2000-2010, trying to identify some of its main explanatory factors. This approach is based on the New Institutional Economics that considers the role of institutions (formal and informal) in the decision to create a firm. An explanatory model of the phenomenon under study is proposed considering various institutional factors (market barriers, duration of procedure, government programs, access to cbkp_redit, freedom of corruption, domestic demand), which is estimated by Feasible Generalized Least Squares. The results reveal the influence of these variables in explaining entrepreneurship, highlighting in particular the role of government programs and absence of market barriers. Several implications for decision-making on the promotion of entrepreneurial activity are derived.