This study acts as a proof of concept to address how general, broadly applicable barriers to starting a business impact entry across various firm sizes.
The following investigation uses barriers to entry data in Teague (2016) to explore the costs of government intervention within the United States for 2011.
Results from cross sectional regression analysis of business entry rates across nine different business size classifications on a composite barrier to entry variable yield two main findings: (1) increase in barriers to entry decrease business growth for most establishment sizes and (2) increase in barriers to entry for larger firms result in positive entry rates.
This study is the first exploration of general, broadly applicable barriers to entry measures and entry rates. Its preliminary findings suggest that barriers to entry encourage development of larger business sizes at the possible expense of smaller businesses. This result encourages further work into the interconnectedness of government and business.
