Title
Regulatory red tape and private firm performance Regulatory red tape and private firm performance
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
Subject
Economics
Source (journal)
Public administration
Volume/pages
93(2015) :1 , p. 34-51
ISSN
1467-9299
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Abstract
Regulation may obstruct dynamic adaptation, innovative power, and entrepreneurial activity. On the other hand, regulation could be interpreted as a phenomenon which society just has to learn to live with, and which otherwise does no real economic harm. This article explores both of these hypotheses. We study the impact of three dimensions of regulatory red tape on the performance of private companies: regulation cost, regulation change, and regulation inconsistency. We analyse unique survey data from 530 Dutch private companies. The results show that regulation cost, inconsistency, and change limit sales turnover growth, and that regulation change hampers market competition performance.