6533b82dfe1ef96bd1291dfe
RESEARCH PRODUCT
Political discretion and corruption: the impact of institutional quality on formal and informal entrepreneurship
Julio César Puche-regalizaIlan AlonJuan Alfredo Jiménez-eguizábalAlfredo Jiménezsubject
EntrepreneurshipGovernmentOrganizational Behavior and Human Resource ManagementComputingMilieux_THECOMPUTINGPROFESSIONPublic economicsPolitical riskCorruptionmedia_common.quotation_subject05 social sciencesDiscretionRule of lawEducationPolitics0502 economics and businessEconomics050207 economicsEconomic systemBusiness and International Management050203 business & managementmedia_commonInstitutional qualitydescription
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.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2017-01-01 | European J. of International Management |