2005

Entrepreneurial activity is one of the main sources for economic growth, innovation and job creation. This work provides the analysis of the influence of government regulations on the entrepreneurial activity across countries around the world. The entrepreneurial activity is defined as the number of small and medium-sized enterprises across 31 countries and as the share of private sector in GDP across 24 transition countries. The impact of government regulations on the business activity is evaluated using indicators concerning the business registration process and the contract enforcement procedure. This work also investigates the entrepreneurial activity in the informal sector of the economy. The results of the study indicate that government regulations negatively influence on the development of small and medium-sized business. Stricter regulation of entry is led to higher level of corruption and a greater size of the informal economy.