The impact of public policy on entrepreneurial activity in emerging markets

Abstract

The outcome of this research paper provides guiding principles to policymakers in emerging markets at a specific policy level in an effort to stimulate entrepreneurial growth and, in turn, increased economic growth. Seven hypotheses relating to either starting a business or the ease of continuing to do business were assessed. The study was completed using a sample of seven emerging markets including Argentina, Brazil, Chile, China, India, Russia and South Africa. Data was sourced from the World Bank and Global Entrepreneurship Monitor. Two multiple regression models were produced to compare the BRICS markets sample to the total sample. It showed that the complexity and time to start a business were not significant to the total sample but were influential within the BRICS countries. Similarly, complexity and time to enforce a contract was proven significant to the BRICS markets but not within the total sample. The total tax rate and the number of tax payments were influential in both models, whilst the time to prepare and pay taxes was significant only within the total sample. The cost to start to start a business did not prove to be significant in either case. Several practical recommendations have been provided to leverage these findings.