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Entrepreneurial activity performs an important role in a nation’s economic dynamics. Previous studies argue that\udinstitutional factors are correlated with the opening of new businesses, however, the literature is divergent as to\udthe effect of bureaucratic corruption on entrepreneurship. Thus, this article aims to investigate the relationship\udbetween entrepreneurship and the incidence of bureaucratic corruption in Brazilian states and its Federal District\ud(Brasilia), for the period of 2000-2008. This study's main hypothesis is that opening a business in Brazilian states\udis negatively affected by the incidence of corruption. Using a regression method with panel data, we estimated\udmodels with pooled data and fixed and random effects. The term entrepreneurship is adopted as the act of starting\uda new business, as in Say (1816), Mescon and Montanari (1981) and Lachman (1980). To measure corruption, we\udused the General Index of Corruption for Brazilian states (Boll, 2010), and to represent entrepreneurship, we used\udfirm entry per capita by state. Tests of the Chow (1960), Hausman (1978) e Breusch and Pagan (1979) indicate\udthat the random effects model is more appropriate, and the results indicate a positive correlation between\udbureaucratic corruption and entrepreneurial activity, contradicting the hypothesis expected and found in previous\udarticles about Brazil

Corrupção Burocrática e Empreendedorismo: Uma Análise Empírica dos Estados Brasileiros