The Role of Regulatory Quality and the Rule of Law on Business Demographic Dynamics in the European Countries

The aim of the paper is to precisely identify the impact of regulatory quality and the rule of law on business demographic dynamics in European countries during the 2015–2024 period. The first aim is to provide a theoretical approach by reviewing aspects of the regulatory system in European countries and the most relevant studies on the issue. The second aim is to develop a linear regression model to evaluate the roles of regulatory quality and the rule of law during periods of economic volatility and changing business demographics in European Countries. The OLS estimation technique for panel data models will be chosen. The results support the hypothesis of an institutional convergence effect, indicating that regulatory quality and the rule of law significantly enhance net firm performance creation, but this impact is conditional on the level of economic development. The paper offers a useful perspective on the complex relationship between regulatory quality and the rule of law in advancing business demographics and promoting performance in the business environment, thereby adding to the existing literature.