Does entrepreneurship policy reform institutional conditions? Evidence from India’s Startup India programme

Abstract This study examines the association between India’s Startup India programme, a comprehensive entrepreneurship policy launched in January 2016, and India’s institutional regulatory environment, operationalised through World Bank Ease of Doing Business rankings. A three-stage quasi-experimental design is applied to a panel of ten emerging economies spanning 2006–2020, with India as the sole treated unit. Principal component analysis orthogonalises seven ecosystem health covariates to remove inter-variable correlation, propensity score matching constructs a counterfactual control group from nine institutionally comparable economies classified under International Monetary Fund and Morgan Stanley Capital International emerging market frameworks, and a difference-in-differences estimation isolates the policy-attributable component of India’s post-2016 ranking improvement, with cluster-robust standard errors applied to address serial correlation. Under the parallel trends and common support assumptions of this framework, Startup India is associated with an approximately 58-rank improvement in India’s ranking relative to matched control economies ( β = − 58.14, p < 0.001), after controlling for global time trends and time-invariant country characteristics. A statistically significant pre-trend result ( p = 0.002) is disclosed transparently; this weakens confidence in the parallel trends assumption underlying the design, and the direction of any resulting bias is not established by the current analysis. The study offers one of the first country-level evaluations of a national entrepreneurship policy using this approach, evidencing that policy-induced institutional reform shocks produce statistically detectable regulatory outcomes within a four-year window. Findings are bounded by the de jure nature of the ranking measure, the single-treated-unit design, and the absence of sub-national heterogeneity analysis.