Share
Recent initiatives in a number of countries have sought to promote entrepreneurship through relaxing the legal consequences of personal bankruptcy. Whilst there is an intuitive link, relatively little attention has been paid to the question empirically, particularly in the international context. We investigate the relationship between bankruptcy laws and entrepreneurship using data on self-employment over 16 years (1990–2005) and fifteen countries in Europe and North America. We compile new indices reflecting how “forgiving” personal bankruptcy laws are. These measures vary over time and across the countries studied. We show that bankruptcy law has a statistically and economically significant effect on self-employment rates when controlling for GDP growth, MSCI stock returns, and a variety of other legal and economic factors.
Source: “Bankruptcy Law and Entrepreneurship” from American Law and Economics Review
Good books about silicon valley and start-ups are here and here.
Is it a bad idea for a start-up to take venture capital money?
Are uncreative entrepreneurs selfish?
Do men and women become entrepreneurs for different reasons?
You should follow me on Twitter here. You can also subscribe to the blog’s feed or follow on Facebook. Here are the site’s most popular posts of all time.