Since the mid-20th century, a significant number of countries have transferred powers to subnational
governments, which has had a considerable impact on the economic and institutional landscape. In this
context, local governments have become essential in the implementation of policies that directly affect the
firm’s demography. Consequently, we analyze the impact of regional authority on a set of outcomes
previously unexplored in the literature: the level of entrepreneurship and firm survival. Results suggest that
greater autonomy can stimulate regional business dynamics, increasing enterprise creation but lowering
survival rates. Moreover, these effects appear to be conditioned by institutional quality, where a stronger
institutional framework enhances the effect of regional authority on business entry and mitigates its impact
on survival.