TY - JOUR
T1 - Political discretion and corruption
T2 - The impact of institutional quality on formal and informal entrepreneurship
AU - Jimenez, Alfredo
AU - Puche-Regaliza, Julio César
AU - Jiménez-Eguizábal, Juan Alfredo
AU - Alon, Ilan
N1 - Publisher Copyright:
© 2017 Inderscience Enterprises Ltd.
PY - 2017
Y1 - 2017
N2 - This paper analyses the impact of political discretion and corruption on firm creation rates, distinguishing between formal and informal entrepreneurship. The results show that political discretion discourages the creation of formal enterprises as fewer restrictions on the government's opportunistic behaviour increases uncertainty and risks for entrepreneurial activities. Corruption also has a negative influence on formal entrepreneurship, as it increases the costs of the procedures required to create and manage the company with no assurance that the other party will fulfil the agreement. Regarding informal entrepreneurship, our results show that the negative impact of corruption also applies to non-formalised firms.
AB - This paper analyses the impact of political discretion and corruption on firm creation rates, distinguishing between formal and informal entrepreneurship. The results show that political discretion discourages the creation of formal enterprises as fewer restrictions on the government's opportunistic behaviour increases uncertainty and risks for entrepreneurial activities. Corruption also has a negative influence on formal entrepreneurship, as it increases the costs of the procedures required to create and manage the company with no assurance that the other party will fulfil the agreement. Regarding informal entrepreneurship, our results show that the negative impact of corruption also applies to non-formalised firms.
KW - Corruption
KW - Firm creation
KW - Formal entrepreneurship
KW - Informal entrepreneurship
KW - Institutional quality
KW - New venture creation
KW - Political constraints
KW - Political discretion
KW - Political risk
KW - Rule of law
UR - http://www.scopus.com/inward/record.url?scp=85018271637&partnerID=8YFLogxK
U2 - 10.1504/EJIM.2017.083873
DO - 10.1504/EJIM.2017.083873
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AN - SCOPUS:85018271637
SN - 1751-6757
VL - 11
SP - 280
EP - 300
JO - European Journal of International Management
JF - European Journal of International Management
IS - 3
ER -