Abstract

For decades, scholars have been concerned with the role of public policy in stimulating entrepreneurial activity. Aside from pro-entrepreneurship policy, governments can also erect barriers to startup activity. Researchers have concluded that the degree of corruption in a country can become a significant deterrent to entrepreneurship, while research on the relationship between bureaucracy and startup rates has been inconclusive. In this study, we apply the theory of planned behaviour–in particular, the perceived behavioural control construct–to clarify the role of corruption and ineffective bureaucracy both independently and jointly in their relationships with entrepreneurship participation rates. Data on individuals from 53 nations for the 2006–2015 period were utilized to test the hypotheses. This research confirms that both are negatively associated with rates of startup activity and that in the context of highly corrupt countries, the two constructs interact to further reduce startup activity.