Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1019657 | Journal of Business Venturing | 2011 | 16 Pages |
Abstract
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 19 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.
Related Topics
Social Sciences and Humanities
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Business and International Management
Authors
Seung-Hyun Lee, Yasuhiro Yamakawa, Mike W. Peng, Jay B. Barney,