Regulation, Innovation, & Entrepreneurship: A Review of the Literature Open Access
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The impact of regulation on innovation and entrepreneurship is a concern all over the world. The regulatory environment in which firms interact can hinder or contribute to the creation and early stage growth of new businesses as well as to the innovative process within a market. This document reviews the empirical literature that explores the relationship between regulation and innovation and regulation and entrepreneurship, focusing on the effects of regulatory quality across countries. As expected, most empirical analyses find a relationship between regulatory restrictions and entrepreneurship. Moreover, the analysis illustrates the complexity of the effect of regulation on innovation. The thematic analysis conducted in this literature review indicates that institutions matter for economic activities and that regulation, as an important part of the institutional environment, is a central aspect of the ecosystem for innovation and entrepreneurial engagement.