English, Article edition: A Spatial Model of the Impact of Bankruptcy Law on Entrepreneurship Aparna Mathur

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  • article
Language
  • English

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Title
  • A Spatial Model of the Impact of Bankruptcy Law on Entrepreneurship
Author
  • Aparna Mathur
Physical Description
  • article
Notes
  • This paper employs spatial econometrics techniques to estimate the impact of bankruptcy regulation on small firm formation. The estimation of the model is computationally challenging due to the joint appearance of a lagged endogenous variable and the unobserved heterogeneity which requires modelling of initial conditions as described in Heckman (1981). We test for the joint significance of the state dummy variables in a way that can be viewed as an interesting alternative to the Hausman procedure. This was important for our analysis since, as sometimes happens in finite samples, the estimated variance-covariance matrix was not positive semi-definite. We found that the predicted probability of starting a business is 25% higher in states with higher bankruptcy exemptions than their neighbours relative to states with lower exemptions than their neighbours. Un modele spatial de l'impact des lois sur la faillite sur la creation d'entreprises Resume La presente communication emploie des techniques d'econometrie spatiale pour evaluer l'impact de la reglementation en matiere de faillite sur la constitution de petites entreprises. L'estimation du modele pose des difficultes sur le plan computationnel en raison de l'apparition conjointe d'une variable endogene decalee et de l'heterogeneite non observee, qui rend necessaire la modelisation de conditions initiales, de la facon decrite par Heckman (1981). Nous testons la signification conjointe des variables indicatrices de l'etat d'une facon qui peut etre consideree comme une alternative interessante a la procedure de Hausman. Ceci etait important pour notre analyse, car, comme nous le relevons parfois dans des echantillons finis, la matrice variance-covariance estimee n'etait pas semi-definie positive. Nous en concluons que la probabilite previsible du lancement d'une affaire est plus elevee de l'ordre de 25% dans les etats qui appliquent des exemptions pour les faillites superieures a celles des pays avoisinants, par rapport aux etats qui appliquent des exemptions inferieures a celles de leurs voisins. Un modelo espacial del impacto de la ley de bancarrotas sobre las iniciativas empresariales Resumen Este articulo emplea tecnicas de econometria espacial para estimar el impacto de las normativas de bancarrotas sobre la formacion de empresas pequenas. La valoracion del modelo es computacionalmente desafiante, debido a la aparicion conjunta de una variable endogena rezagada y heterogeneidad inadvertida que requieren la modelacion de las condiciones iniciales, como se describe en Heckman (1981). Ensayamos la significancia conjunta de las variables de prueba estatales de una forma que puede percibirse como una alternativa interesante al procedimiento Hausman. Esto fue importante para nuestro analisis, ya que, como ocurre a veces con muestras finitas, la matriz estimada de varianza-covarianza no fue semidefinitiva positiva. Descubrimos que la probabilidad predicha de iniciar un negocio es un 25% mayor en los estados con mayores exenciones de bancarrota que sus vecinos, en relacion con estados con menos exenciones que sus vecinos. [image omitted]
  • Entrepreneurship, spatial econometrics, probit model,
  • RePEc:taf:specan:v:4:y:2009:i:1:p:25-51
Language
  • English
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