Entrepreneurship: How Much Does the Business Environment Matter?

Entrepreneurship is important for the continued dynamism of modern economies and for job creation. Policymakers need to know how new firms get started and what financial and institutional factors promote entrepreneurial activity. A new cross-country, time-series data set shows a strong correlation between entrepreneurship and the quality of the legal and regulatory environment, ease of access to finance, and prevalence of informality. This finding tells policymakers what they can do to promote entrepreneurship. World Bank Public Policy Journal No. 313. http://rru.worldbank.org/PublicPolicyJournal/Summary.aspx?id=313