Hybrid entrepreneurship and public policy: The case of firm entry deregulation

•The paper addresses hybrid entrepreneurs' responsiveness to public policy.•We analyze an extensive Mexican firm entry deregulation reform (SARE).•Hybrid entrepreneurs are more responsive to SARE than full-time entrepreneurs.•The effect is strongest for highly educated hybrid entrepreneurs.•Part-time entrepreneurs are also more responsive than full-time entrepreneurs.

Hybrid entrepreneurs are entrepreneurs who are simultaneously working as paid employees. Although they constitute a systematic and large part of new firm creation, their possibly distinct responsiveness to public policy is not yet studied. Arguing for the need to consider hybrid entrepreneurs in public policy, we analyze the introduction of one-stop shops for faster and simplified firm registration in Mexico. We find that hybrid entrepreneurs are more responsive to changes in entry regulation than full-time entrepreneurs. While both the best and least educated people respond to the reform, the effect is most pronounced for highly educated hybrid entrepreneurs.