Barriers to entry: an empirical account of business creation difficulties in the United States 2011

Abstract

PurposeThis study acts as a proof of concept to address how general, broadly applicable barriers to starting a business impact entry across various firm sizes.Design/methodology/approachThe following investigation uses barriers to entry data in Teague (2016) to explore the costs of government intervention within the United States for 2011.FindingsResults from cross sectional regression analysis of business entry rates across nine different business size classifications on a composite barrier to entry variable yield two main findings: (1) increase in barriers to entry decrease business growth for most establishment sizes and (2) increase in barriers to entry for larger firms result in positive entry rates.Originality/valueThis study is the first exploration of general, broadly applicable barriers to entry measures and entry rates. Its preliminary findings suggest that barriers to entry encourage development of larger business sizes at the possible expense of smaller businesses. This result encourages further work into the interconnectedness of government and business.