How do bankruptcy laws as formal institutions affect entrepreneurship development around the world? Do entrepreneur-friendly bankruptcy laws encourage more entrepreneurship development at a societal level? We posit that if bankrupt entrepreneurs are excessively punished for failure, they may give up potentially high-return but inherently high-risk opportunities to start new businesses. Amassing a cross-country database from 29 countries spanning 19. years (1990-2008), we find that lenient, entrepreneur-friendly bankruptcy laws are significantly correlated with the level of entrepreneurship development as measured by the rate of new firm entry. © 2010 Elsevier Inc.
CITATION STYLE
Lee, S. H., Yamakawa, Y., Peng, M. W., & Barney, J. B. (2011). How do bankruptcy laws affect entrepreneurship development around the world? Journal of Business Venturing, 26(5), 505–520. https://doi.org/10.1016/j.jbusvent.2010.05.001
Mendeley helps you to discover research relevant for your work.