Barriers to entry index: a ranking of starting a business difficulties for the United States
Journal of Entrepreneurship and Public Policy
ISSN: 2045-2101
Article publication date: 7 November 2016
Abstract
Purpose
The purpose of this paper is to present a new data set documenting various costs to starting a business across the 50 US states for the year 2011.
Design/methodology/approach
The first ranking weights and organizes measures using principal components analysis. The second ranking averages subcomponents of the data across groups of variables with common themes.
Findings
Most states largely maintain their relative position across both Methods 1 and 2 despite the difference in organization and weight of variables and groups across the two ranking methods – 21 of the top 25 states remained in the top 25 in both the Methods 1 and 2 rankings. Some states experience not insignificant changes between the two indexes and a few experience substantial changes. These changes can be attributed to the importance Method 1 places upon final fees, final processing time, and application formats for the Secretary of State.
Research limitations/implications
A lack of empirical evidence, additional data, and a definitive theory on the impacts of barriers to entry measures for the USA constrains both how the data are presented as well as which measures were collected. This paper attempts to accommodate for this by presenting rankings derived from different methodologies.
Practical implications
The composite barriers to entry measures can be used in policy analysis and possible research on rent-seeking. These data can also be used to study the determinants and relative costs of entrepreneurship.
Originality/value
This paper presents entry-specific regulatory measures currently undocumented in the literature.
Keywords
Acknowledgements
The author is grateful to the Goldwater Institute and Darcy Olsen for overseeing the initial development of this project and for granting permission to collect the data for this paper while working as a Norman P. McClelland Fellow. The author would like to thank Dr Byron Schlomach, Steve Slivinski, Dr Antony Davies, Dr Robert Lawson, Dr Joshua Hall, and Dr Russ Sobel for their recommendations and also Jewel Loree, Carlos Alfaro, Johnny Jeltema, Anson Clarkson, Drew Sexton, Cody Huffaker, Aditya Dynar, and Giselle Alexander for their immeasurable help in data collection. The author would also like to thank Alexander Krischik for his time and patience in editing.
Citation
Teague, M. (2016), "Barriers to entry index: a ranking of starting a business difficulties for the United States", Journal of Entrepreneurship and Public Policy, Vol. 5 No. 3, pp. 285-307. https://doi.org/10.1108/JEPP-02-2016-0007
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited