Economic development levels and ease of doing business: is there a relationship?

Abstract

Purpose

Entrepreneurship is a phenomenon strongly associated with economic growth, development and employability, leading countries to compete and often produce reforms to ensure good levels of entrepreneurship. In this sequence, this study aims to know which types of economies present favourable institutional environments for entrepreneurs, exploring the link between the ease of doing business and the three levels of economic development (innovation-driven, efficiency-driven and factor-driven) of 137 economies.

Design/methodology/approach

A quantitative methodology through an analysis of variances was adopted, gathering data from the ten pillars proposed by the World Bank in the Doing Business 2019 – training for reforms report, and economic development levels, provided by Global Competitiveness Report (2017–2018).

Findings

In the light of institutional theory, the results showed that innovation-driven economies are more competitive, presenting more robust institutional environments for entrepreneurs than factor-driven and efficiency-driven. There is only one exception in the Getting Credit pillar.

Originality/value

This study clarifies some assumptions in the previous literature that developed economies have better business environments, being the first one to establish this relationship directly. Some practical implications, especially for international entrepreneurs in the decision-making phase on which type of economies to carry out their investments and policymakers and researchers, were provided in this study.

Citation

Nave, E. and Rodrigues, R.G. (2023), "Economic development levels and ease of doing business: is there a relationship?", Review of International Business and Strategy, Vol. 33 No. 3, pp. 371-396. https://doi.org/10.1108/RIBS-11-2021-0151