Date of Award


Document Type


Degree Name

Master of Arts (MA)

Legacy Department



Hanssen, Andrew

Committee Member

Tollison , Robert

Committee Member

Hobbs , Bradley


This paper looks at the effect of economic freedom, a cost of investment for entrepreneurial action, on the amount of firms established across states and years. My hypothesis is that economic freedom has a positive effect on the number of firms that are established in a given year. My assumption for why this is the case is because greater economic freedom implies that costs of investing in a new firm will decrease thereby increasing the incentive to create new firms. I use data from the Mercatus Institutes Freedom index and the United States Census Bureau for firm formation and economic freedom, respectively. I use data that is across states for 2002, 2008, and 2010 I find that economic freedom has a statistically significant economic effect on the number of firms established.

Included in

Economics Commons