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

Dana L. Haggard (Department of Management and Information Technology, Missouri State University, Springfield, Missouri, USA)
K. Stephen Haggard (Department of Finance and General Business, Missouri State University, Springfield, Missouri, USA)

International Journal of Organization Theory & Behavior

ISSN: 1093-4537

Article publication date: 12 November 2018

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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.

Keywords

Citation

Haggard, D.L. and Haggard, K.S. (2018), "The impact of law, religion, and culture on the ease of starting a business", International Journal of Organization Theory & Behavior, Vol. 21 No. 4, pp. 242-257. https://doi.org/10.1108/IJOTB-04-2018-0043

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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