How do bankruptcy laws affect entrepreneurship development around the world?
How do bankruptcy laws as formal institutions affect entrepreneurship development around the world? Do entrepreneur-friendly bankruptcy laws encourage more entrepreneurship development at a societal level? We posit that if bankrupt entrepreneurs are excessively punished for failure, they may give up potentially high-return but inherently high-risk opportunities to start new businesses. Amassing a cross-country database from 29 countries spanning 19Â years (1990-2008), we find that lenient, entrepreneur-friendly bankruptcy laws are significantly correlated with the level of entrepreneurship development as measured by the rate of new firm entry.
Year of publication: |
2011
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Authors: | Lee, Seung-Hyun ; Yamakawa, Yasuhiro ; Peng, Mike W. ; Barney, Jay B. |
Published in: |
Journal of Business Venturing. - Elsevier, ISSN 0883-9026. - Vol. 26.2011, 5, p. 505-520
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Publisher: |
Elsevier |
Keywords: | Bankruptcy laws Entrepreneurship Institutions Institution-based view |
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