Entry regulation as a barrier to entrepreneurship

  title={Entry regulation as a barrier to entrepreneurship},
  author={Leora Klapper and L. Laeven and Raghuram G. Rajan},
  journal={Journal of Financial Economics},
  • Leora Klapper, L. Laeven, Raghuram G. Rajan
  • Published 2006
  • Economics
  • Journal of Financial Economics
  • Using a comprehensive database of European firms, we study the effect of market entry regulations on the creation of new limited-liability firms, the average size of entrants, and the growth of incumbent firms. We find that costly regulations hamper the creation of new firms, especially in industries that should naturally have high entry. These regulations also force new entrants to be larger and cause incumbent firms in naturally high-entry industries to grow more slowly. Our results hold even… CONTINUE READING
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