Which political regimes foster entrepreneurship? An international examination

Whereas the influence of political regimes across various dimensions of economic and political performances has been considered by many scholars, the political regime-entrepreneurship relation has received relatively less attention. This paper uses data on a large sample of nations over two decades to examine the impact of different political regimes on nascent and established entrepreneurs. Results show that while the consideration of aggregate democracies boosts established entrepreneurs, it does not significantly affect nascent entrepreneurship. A unique finding is that border (spatial) democracies have positive spillovers on entrepreneurship in a nation and these spillovers hold across entrepreneurship types. Furthermore, the positive effects of political regimes are not confined to democracies and these influences vary across nascent and established entrepreneurs. Military regimes, however, consistently showed no significant impact on either form of entrepreneurship considered. Finally, the introduction of corruption, capturing institutional weakness, shows that greater corruption acts as an impediment to entrepreneurship, offsetting some of the positive spillovers from political structures.