Policy at the local level

Date07 October 2013
Published date07 October 2013
AuthorStephan F. Gohmann
Subject MatterStrategy,Entrepreneurship,Business climate/policy
Policy at the local level
Stephan F. Gohmann
Department of Economics, College of Business, University of Louisville,
Louisville, Kentucky, USA
Purpose – The purpose of this paper is to discuss the appropriate level of data to use for the analysis
of public policies.
Design/methodology/approach – The paper discusses national, regional and local levels of
analysis and the benefits of using local data when available.
Findings – A benefit of local analysis is that policy implications may be clearer.
Originality/value – The paper gives a better understanding of the costs and benefits of different
levels of data analysis.
Keyword Entrepreneurship
Paper type General review
Research examining the influence of policies on entrepreneurship follows many levels
of analysis. The levels of analysis include international, regional, local and individual
comparisons. The availability of data and the hypotheses tested often influence which
of these levels of analysis researchers pursue. Finding the appropriate level of analysis,
policies to analyze and data will allow the researcher to better aid policy makers
and the public in understanding the effects various policies have on entrepreneurial
endeavors along with the consequent influence on the long-term growth potent ial
of the economy.
From the perspective of Mises, it is the individual who acts and thus the individual
might be the appropriate unit of analysis. But the entrepreneur “is always under the
necessity of adjusting the conduct of his business to the institutional conditions of his
country” (Mises, 1949, p. 81). As a consequence, more ag gregated data may be more
appropriate for examining how these institutional condition s influence entrepreneurial
behavior. For example, international differences in taxes on profits might be examined
using country-level data, whereas, differences in licensing requirements for architects
might show differences in entrepreneurial behavior of architects among cities o r states.
Davidsson and Wiklund (2001) argue that not only is the individual level of analysis
important, but that the level of analysis ne eds to include structural levels be cause
entrepreneurship affects growth and is affected by various policies and institutions.
In empirical analyses of policy influences on entrepreneurship, two impor tant
issues often arise: how to define entrepreneurship and how to measure policy
differences? The definition of entrepreneurship and the measures of policy are likely to
depend on the availability of data and might vary when performing international,
regional and local comparisons. These issues are discussed below.
Levels of analysis
Many researchers have attempted to explain why entrepreneurship rates vary among
countries (see e.g. Blanchflower, 2000; Blanc hflower et al., 2001; Busenitz et al., 2000;
Verheul et al., 2006). At this cross-countr y level of analysis, the variable used to
measure entrepreneurship that is comparable across countries is often limited to the
The current issue and full text archive of this journal is available at
Journal of Entrepreneurship and
Public Policy
Vol. 2 No. 2, 2013
pp. 104-109
rEmeraldGroup PublishingLimited
DOI 10.1108/JEPP-09-2012-0047

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