Arbeitspapier

Evasive Entrepreneurship and Institutional Change

In this paper, we argue that evasive entrepreneurship is an important source of innovation in the economy. Institutions may prevent or raise the cost of exploiting business opportunities, which can trigger evasive behavior because an entrepreneur may earn large rents by circumventing institutional impediments. Paradoxically, institutions may be less of a constraint for entrepreneurs than for other economic agents because entrepreneurs may be better able to evade them. Although evasive entrepreneurship can be both productive and unproductive/destructive, its dynamic character is more important because evasive entrepreneurship may be able to prevent economic development from being stifled by existing institutions during times of rapid economic change. Furthermore, if evasive entrepreneurship becomes sufficiently widespread and economically important, it may trigger a response from lawmakers and regulators, leading to institutional change with potentially important welfare implications. We illustrate this thesis by considering a number of real-word examples of evasive entrepreneurship.

Language
Englisch

Bibliographic citation
Series: IFN Working Paper ; No. 1044

Classification
Wirtschaft
Regulation and Industrial Policy: General
New Firms; Startups
Innovation and Invention: Processes and Incentives
Capitalist Systems: Property Rights
Subject
Entrepreneurship
Innovation
Institutions
Regulation
Self-employment

Event
Geistige Schöpfung
(who)
Elert, Niklas
Henrekson, Magnus
Event
Veröffentlichung
(who)
Research Institute of Industrial Economics (IFN)
(where)
Stockholm
(when)
2014

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Elert, Niklas
  • Henrekson, Magnus
  • Research Institute of Industrial Economics (IFN)

Time of origin

  • 2014

Other Objects (12)