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The impact of higher quality government regulation of business and greater economic freedom on living standards: Evidence from OECD nations

Richard Cebula (Department of Finance, Accounting and Economics Jacksonville University, Jacksonville, Florida, USA)
Fabrizio Rossi (University of Cassino and Southern Lazio, Cassino, Italy)
Jeff Clark (The University of Tennessee at Chattanooga, Chattanooga, Tennessee, USA)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Article publication date: 11 April 2016

547

Abstract

Purpose

The purpose of this paper is to evaluate whether two specific forms of government policy influence entrepreneurship and hence the performance economy as a whole. Performance is measured in terms of living standards and growth therein. The policies are, as follows: higher quality government regulation of businesses and higher levels of economic freedom.

Design/methodology/approach

The paper first provides a basic model focussing upon the regulation and economic freedom variables. The study then adds a dummy variable for G8 nations, a tax burden variable, and the long-term interest rate and provides six estimates. The empirical analysis involves pooled time-series/cross-section data for the OECD over the period 2003-2007.

Findings

The findings indicate that for OECD nations, higher quality public regulation promotes entrepreneurial spirit and performance. Higher economic freedom does the same. The findings are that higher quality government regulation of business and higher levels of economic freedom lead to higher growth rates in the standard of living.

Originality/value

The time period studied, i.e., just prior to the Great Recession, the context of the OECD, the adoption of pooled time-series/cross-section data, and the specific choice of variables in the analysis, along with the estimation of possibly unique or close to unique specifications involving the growth rate of living standards per se make this study different.

Keywords

Acknowledgements

JEL Classification — G30, G38, E02, E43, H22, H26

Citation

Cebula, R., Rossi, F. and Clark, J. (2016), "The impact of higher quality government regulation of business and greater economic freedom on living standards: Evidence from OECD nations", Journal of Entrepreneurship and Public Policy, Vol. 5 No. 1, pp. 82-94. https://doi.org/10.1108/JEPP-11-2015-0034

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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