Influence of institutional economics on firm birth and death: A comparative analysis of hospitality and other industries

Mehmet Altin, Jorge Ridderstaat, Gabriela Lelo de Larrea, Mehmet Ali Köseoglu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

2 Citations (Scopus)

Abstract

This paper investigates how public policies, such as taxes and regulations influence firm formation (birth) and closure (death) in the hospitality and other industries in the United States (US), using an institutional economics approach and the dimensions of the Economic Freedom of North America (EFNA) index. The literature has been scant when it comes to examining the effects of policies of formal institutions on firms’ birth and death in the hospitality industry, and whether these effects in hospitality differ from those of other sectors. The study uses panel data from government sources and the EFNA dimensions and applies cross-sectional dependence and unit root tests, followed by a panel generalized least square approach for the analysis. Our findings show that components of economic freedom have varying effects on firms’ birth and death. The study provides practical contributions for policymakers and managers by improving the understanding of firm births and deaths in the US.

Original languageEnglish
Article number102442
JournalInternational Journal of Hospitality Management
Volume86
DOIs
Publication statusPublished - Apr 2020

Keywords

  • Economic freedom
  • Entrepreneurship
  • Firm birth and death
  • Hospitality industry
  • Institutional economics
  • Public policies

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

Cite this