2007/09/28 by Christian Bjørnskov, Nicolai J. Foss · 2 citations
Computer Science · Economics, Econometrics and Finance · Social Sciences · #Corruption and Economic Development #Economic Growth and Development #Economic Growth and Productivity
paper · doi:10.1007/s11127-007-9229-y
openalex publication_date 2007/09/28 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/03
While much attention has been devoted to analyzing how the institutional framework and entrepreneurship impact growth, how economic policy and institutional design affect entrepreneurship appears to be much less analyzed. We try to explain cross-country differences in the level of entrepreneurship by differences in economic policy and institutional design. Specifically, we use the Economic Freedom Index from the Fraser Institute to ask which elements of economic policy making and the institutional framework are conducive to the supply of entrepreneurship, measured by data on entrepreneurship from the Global Entrepreneurship Monitor. We find that the size of government is negatively correlated and sound money is positively correlated with entrepreneurial activity. Other measures of economic freedom are not significantly correlated with entrepreneurship.