Books and journals Case studies Expert Briefings Open Access
Advanced search

Economic freedom and entrepreneurial activity

Juan Carlos Díaz‐Casero (Faculty of Business Studies and Tourism, University of Extremadura, Cáceres, Spain)
D. Ángel Manuel Díaz‐Aunión (Faculty of Business Studies and Tourism, University of Extremadura, Cáceres, Spain)
Mari Cruz Sánchez‐Escobedo (Faculty of Business Studies and Tourism, University of Extremadura, Cáceres, Spain)
Alicia Coduras (GEM Spain, Nebrija University, Madrid, Spain)
Ricardo Hernández‐Mogollón (Faculty of Business Studies and Tourism, University of Extremadura, Cáceres, Spain)

Management Decision

ISSN: 0025-1747

Publication date: 12 October 2012

Abstract

Purpose

–

The purpose of this paper is to examine empirically whether economic freedom affects entrepreneurial activity in three groups of countries, classified according to economic development.

Design/methodology/approach

–

Data on the index of entrepreneurial activity cover the period between 2002 and 2009, and are taken from the annual GEM (Global Entrepreneurship Monitor) reports and from the Index of Economic Freedom published by The Heritage Foundation from 1995 to 2009. The same analysis is carried out, grouping the countries by development level, following the classification included in the Global Competitiveness Report 2009‐2010. A Ridge regression analysis is performed to measure the model's goodness‐of‐fit and to determine equations that can be used for future predictions.

Findings

–

The results obtained in the correlation analysis show that economic freedom is closely related to entrepreneurial activity. The results suggest that TEA rates, opportunity‐TEA rates and necessity‐TEA rates decrease when there is an increase in economic freedom in a country, as just two of the areas analyzed – i.e. “government size” and “fiscal freedom” – appear to foster the emergence of new entrepreneurs. When countries are grouped by level of economic development, the results for countries belonging to the “Innovation‐Driven Economies” group show that the opportunity‐TEA rates increase as the economic freedom index grows.

Originality/value

–

The study indicates that entrepreneurship by opportunity increases in the group of Innovation‐Driven Economies with smaller “government size” and more “fiscal freedom”.

Keywords

  • Entrepreneurship
  • Entrepreneurial activity
  • Economic freedom
  • Institutional framework
  • Modelling
  • Innovation

Citation

Carlos Díaz‐Casero, J., Ángel Manuel Díaz‐Aunión, D., Cruz Sánchez‐Escobedo, M., Coduras, A. and Hernández‐Mogollón, R. (2012), "Economic freedom and entrepreneurial activity", Management Decision, Vol. 50 No. 9, pp. 1686-1711. https://doi.org/10.1108/00251741211266750

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

Please note you do not have access to teaching notes

You may be able to access teaching notes by logging in via Shibboleth, Open Athens or with your Emerald account.
Login
If you think you should have access to this content, click the button to contact our support team.
Contact us

To read the full version of this content please select one of the options below

You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account.
Login
To rent this content from Deepdyve, please click the button.
Rent from Deepdyve
If you think you should have access to this content, click the button to contact our support team.
Contact us
Emerald Publishing
  • Opens in new window
  • Opens in new window
  • Opens in new window
  • Opens in new window
© 2021 Emerald Publishing Limited

Services

  • Authors Opens in new window
  • Editors Opens in new window
  • Librarians Opens in new window
  • Researchers Opens in new window
  • Reviewers Opens in new window

About

  • About Emerald Opens in new window
  • Working for Emerald Opens in new window
  • Contact us Opens in new window
  • Publication sitemap

Policies and information

  • Privacy notice
  • Site policies
  • Modern Slavery Act Opens in new window
  • Chair of Trustees governance statement Opens in new window
  • COVID-19 policy Opens in new window
Manage cookies

We’re listening — tell us what you think

  • Something didn’t work…

    Report bugs here

  • All feedback is valuable

    Please share your general feedback

  • Member of Emerald Engage?

    You can join in the discussion by joining the community or logging in here.
    You can also find out more about Emerald Engage.

Join us on our journey

  • Platform update page

    Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

  • Questions & More Information

    Answers to the most commonly asked questions here