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Public Choice

, Volume 136, Issue 3–4, pp 269–282 | Cite as

The institutions of economic freedom and entrepreneurship: evidence from panel data

  • Kristina NyströmEmail author
Article

Abstract

This paper provides new evidence on the determinants of entrepreneurship across countries. The paper investigates the relationship between the institutional setting, in terms of economic freedom, and entrepreneurship, measured by self-employment, in a panel data setting covering 23 OECD countries for the period 1972–2002. The measure of economic freedom includes five aspects: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and the regulation of credit, labour and business. The empirical findings show that a smaller government sector, better legal structure and security of property rights, as well as less regulation of credit, labour and business tend to increase entrepreneurship.

Keywords

Entrepreneurship Self-employment Institutions Economic freedom 

JEL Classification

M13 O50 

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Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  1. 1.Division of EconomicsThe Royal Institute of TechnologyStockholmSweden
  2. 2.The Ratio InstituteStockholmSweden

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