Business environment reforms effect on entrepreneurial activities of high-income economies: panel data evidence

Abstract

PurposeEntrepreneurship is an activity of recognised economic and social interest, leading scholars to examine contextual factors that justify variations between economies and governments to configure more favourable conditions to entrepreneurial activity. In this sequence, this study aims to analyse the effect of reforms produced in the business environment on entrepreneurial rates of a set of 18 high-income economies.Design/methodology/approachA panel data (2010–2019) methodology was adopted using 10 Doing Business indicators from World Bank and Total early-stage Entrepreneurial Activity (TEA) from Global Entrepreneurship Monitor (GEM).FindingsIn the light of institutional theory, the study shows that improving the business environment for entrepreneurs does not ensure an increase in TEA. Specifically, only the indicators Dealing with Construction, Registering Property and Enforcing Contracts positively impacted the TEA.Originality/valueThis is the first study that monitors and provides evidence regarding the effectiveness of business environment reforms towards entrepreneurship. The authors provide considerable theoretical-practical implications for scholars, entrepreneurs and policymakers to restructure public policies to support entrepreneurial activity.