Date on Master's Thesis/Doctoral Dissertation

12-2011

Document Type

Doctoral Dissertation

Degree Name

Ph. D.

Department (Legacy)

College of Business

Author's Keywords

Formal institutions; Economic freedom; Entrepreneurship

Subject

Entrepreneurship--Social aspects; Entrepreneurship--Government policy; Corporate culture

Abstract

This dissertation is composed of three essays in which I examine the influence of formal institutions on entrepreneurs and new firms. In the first essay, "The Influence of Institutions on the Likelihood of Self-Employment: A Multilevel Analysis," I examine how institutions at the country-level are related to the likelihood that individuals in those country are self-employed. Country-level measures of formal institutions are paired with individual-level data on self-employment from the Global Entrepreneurship Monitor (Reynolds et al., 2005). Using the Fraser Institute's Economic Freedom of the World index and the Heritage Foundation's Index of Economic Freedom separately as measures of institutions, I find that sound money in a country is positively associated with individual self-employment with both indices. Property rights and trade freedom are positively related to self-employed using the Economic Freedom of the World index. In the second essay, "Labor Market Institutions and New Firm Employment Growth,'" I examine how state-level labor market characteristics such as minimum wages, union densities, and unemployment insurance premiums influence employment growth in new firms. I use firm-level data from the Kauffman Firm Survey (DesRoches, Robb, & Mulcahy, 2009), which contains data from several thousand new firms for years 2004-2008. Minimum wages, union densities, and unemployment insurance structure do not predict the level of employment in new firms in the manner hypothesized. In the third essay, "The Impact of Taxes and Regulations on New Firm Births and Deaths in State Border Counties," I examine how state-level measures of government size, taxation burdens, unionization levels, and minimum wages influence the birth and death rates of firms in counties located on state borders. Tabulations containing data on establishment births and deaths by U.S. County (Plummer & Headd, 2008) were merged with measures of government size, taxation burdens, union densities, and minimum wages. I find a negative relationship between the overall tax burden and the birth rate of new firms. However, unionization, minimum wages and government size are not related to the birth and death rates of firms in the manner hypothesized.

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