Nelson Granados and Brian Mulligan Examine How Business Regulations Influence Entrepreneurial Behavior

Brian Mulligan (Executive DBA ’21) and Pepperdine Graziadio faculty member Nelson Granados have co-authored a new study in the Engaged Management Review examining how business regulations influence entrepreneurial behavior and firm performance. Their research focuses on TRAILS, taxes, regulations, assessments, interventions, litigation, and subsidies, and how their calibration affects innovation and market dynamics.

The study draws on 17 in-depth interviews with top executives across industries, using an applied constructivist grounded theory design to analyze perspectives on regulatory impacts. Mulligan and Granados find that “right-sized” TRAILS catalyze entrepreneurial dynamism, while overly restrictive or inconsistent TRAILS impose hidden opportunity costs, stifle innovation, and erode institutional trust.

A key insight from the research is the government’s role as the “Umpire,” serving as an impartial enforcer and calibrator of TRAILS to sustain market feedback loops and protect public welfare. The study also highlights the value of executives contributing to policy design in an advisory capacity, ensuring regulations reflect real-world business insights without expanding the state’s remit.

Mulligan and Granados’ findings provide actionable guidance for policymakers and executives alike, emphasizing the need for flexible, dynamic regulatory frameworks that support business growth while safeguarding public interest.

Read the full study here.