Title

The impact of law, religion, and culture on the ease of starting a business

Abstract

Purpose: The purpose of this paper is to examine the effects of culture, legal origin and religion on four measures of the ease of starting a new business; the number of procedures required, the number days required, the ease of getting credit and the cost to start a business.

Design/methodology/approach: The authors use linear regression to test the hypotheses using publicly available data on legal origin and religion from La Porta et al. (1999), cultural dimension information from Hofstede (2009) and measures of the ease of starting a business from the World Bank’s (2017) Doing Business Initiative. The final sample consists of 71 countries for which information was available on all the variables of interest.

Findings: Legal origin affects the number of procedures and the length of time needed to start a business, as well as the ease of getting credit. Culture (power distance) and religion are important for explaining gender differences in the ease of starting a business. The cost of starting a business is unrelated to culture, legal origin or religion. Originality/value: Economic development is an important determinant of a country’s political stability and standard of living. Although politicians play a significant role in how a friendly a country is toward business, the study demonstrates that other longer-term and less dynamic factors have a material influence on economic development.

Department(s)

Management
Finance and General Business

Document Type

Article

DOI

https://doi.org/10.1108/IJOTB-04-2018-0043

Keywords

Culture, Ease of starting a business, Economic development, Gender, Law, Religion

Publication Date

11-12-2018

Journal Title

International Journal of Organization Theory and Behavior

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