Entrepreneurship, Corruption, and the Size of U.S. Underground Economies
Journal of Entrepreneurship and Public Policy, 2015, 4(3): 313-330
Posted: 17 Feb 2013 Last revised: 29 Oct 2015
Date Written: November 2, 2014
Abstract
Using state-level data on productive and unproductive entrepreneurship, shadow economy size, and public official corruption, this paper examines whether formal sector productive (unproductive) entrepreneurial activity is associated with lower (higher) levels of informal economic activity. Additionally, I aim to connect entrepreneurship, shadow economy size, and corruption by asking whether corruption affects entrepreneurial outcomes primarily through its effects on the shadow economy. I contend that if this is the case, then estimates of corruption should serve as a good instrument for shadow economy size in regressions on formal sector entrepreneurial outcomes.
Keywords: corruption, institutional quality, productive entrepreneurship, unproductive entrepreneurship, rent-seeking, shadow economy, U.S. states
JEL Classification: H71, K1, K4, L26, O10, O18, O51, R11
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Institutions and Entrepreneurship Development in Russia: A Comparative Perspective
By Saul Estrin, Ruta Aidis, ...
-
Politics and Entrepreneurship in Transition Economies
By Simon Johnson, Daniel Kaufmann, ...
-
Sustaining Entrepreneurial Capitalism
By William J. Baumol, Robert E. Litan, ...
-
Entrepreneurial Entry: Which Institutions Matter?
By Ruta Aidis, Saul Estrin, ...
-
Entrepreneurial Entry: Which Institutions Matter?
By Ruta Aidis, Saul Estrin, ...