Purpose

This paper aims to examine how economic freedom impacts the initial choice of legal structure for startup firms. The authors do this by first exploring whether economic freedom is an essential determinant of the initial legal form of organization (LFO). The authors then explore the impact of economic freedom on firms' choice of changing their initial legal structure over time and how this change impacts their survival rate.

Design/methodology/approach

The authors employ a multinomial logistic regression model to measure the initial determinants of LFO by utilizing an eight-year panel data set of 4,928 startups in the USA through the Kauffman firm survey and merge it with the Economic Freedom in North American index from the Fraser Institute. The authors then employ a logistic regression model to examine the determinants facilitating a change in legal structure over time.

Findings

The results show that economic freedom is a significant determinant in the choice of legal structure. The findings also report that the majority of startups do not change their legal form, but of those that do change the legal structure show a higher survival rate.

Research limitations/implications

Major limitations are the size of the data and the nature of somewhat limited economic freedom differences with the USA. More nuanced measures of economic freedom would be highly desirable.

Practical implications

Policymakers should take note that limited red tape, smoothly working labor markets and straightforward processes for changes of legal structures of organizations would improve survival and growth odds for entrepreneurs.

Originality/value

Drawing on the theory of institutions, the authors attempt to bridge a gap in the literature by explicitly analyzing the determinants of the legal structure in startups in light of economic freedom. Institutional factors do not work in isolation; therefore, the authors also employ traditional entrepreneur-specific variables that affect the choice of legal structure in addition to the institutional framework.

中文翻译：

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制度、创业适应和组织的法律形式

目的

本文旨在研究经济自由如何影响初创公司对法律结构的初始选择。为此，作者首先探讨了经济自由是否是组织的初始法律形式 (LFO) 的重要决定因素。然后，作者探讨了经济自由对公司选择随时间改变其初始法律结构的影响以及这种变化如何影响其生存率。

设计/方法/方法

作者采用多项逻辑回归模型，通过考夫曼公司调查，利用美国 4,928 家初创公司的八年面板数据集来衡量 LFO 的初始决定因素，并将其与弗雷泽研究所的北美经济自由指数合并. 然后，作者采用逻辑回归模型来检查促进法律结构随时间变化的决定因素。

发现

结果表明，经济自由是法律结构选择的重要决定因素。调查结果还报告称，大多数初创公司并没有改变其法律形式，但在那些确实改变了法律结构的初创公司中，存活率更高。

研究限制/影响

主要限制是数据的大小以及与美国经济自由差异有限的性质。更细致的经济自由措施将是非常可取的。

实际影响

政策制定者应注意，有限的繁文缛节、顺畅运作的劳动力市场以及组织法律结构变更的简单流程将提高企业家的生存和成长几率。

原创性/价值

借鉴制度理论，作者试图根据经济自由明确分析初创企业法律结构的决定因素，从而弥合文献中的空白。制度因素不是孤立的；因此，除了制度框架之外，作者还采用了影响法律结构选择的传统企业家特定变量。