Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 807: Entrepreneurial Innovations, Entrepreneurship Policy and Globalization

Robin Douhan, Pehr-Johan Norbäck () and Lars Persson ()
Additional contact information
Robin Douhan: Research Institute of Industrial Economics (IFN)
Pehr-Johan Norbäck: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Lars Persson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: What explains the world-wide trend of pro-entrepreneurial policies in the last few decades? We study entrepreneurial policy in a lobbying model taking into account the con.ict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies. It becomes more difficult to protect the profits of incumbent firms from entrepreneurial entry and pro-entrepreneurial policies make foreign entrepreneurs less aggressive. Making use of the Doing Business database, we find, consistent with our theory, evidence that international openness reduces barriers to entry for new entrepreneurs and that the effect is stronger in countries with more rent-seeking governments.

Keywords: Entrepreneurship; Regulation; Innovation; Market Integration; Lobbying

JEL-codes: D73; F15; L26; L51; O31

59 pages, First version: August 24, 2009. Revised: July 23, 2013.

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