Research indicates that American companies and entrepreneurs still benefit from one of the most favorable business climates in the world, but government regulation and oversight may be eroding the country's advantages.

The Heritage Foundation and the Wall Street Journal partnered to produce the 2013 Index of Economic Freedom, placing the United States at 10th in the rankings, between Denmark and Ireland, which marks the U.S.'s lowest score on the index since 2000.

Explaining the decline, Heritage researchers said reductions in "monetary freedom, business freedom, labor freedom, and fiscal freedom" are dragging down the nation's economic competitiveness, and that "dynamic entrepreneurial growth is stifled by ever-more-bloated government and a trend toward cronyism that erodes the rule of law... Prospects for greater fiscal freedom are uncertain due to the scheduled expiration of previous cuts in income and payroll taxes and the imposition of new taxes associated with the 2010 health care law."

The more positive assessment from Doing Business praises the U.S. for making it easier to start a business, which is typically associated with increases in the number of newly registered firms and sustained gains in economic performance, including improvements in employment and productivity because most economic growth "is driven by the entry of new formal businesses rather than by the growth of existing firms."

And the Heritage report agrees that business start-up regulations provide a distinct advantage in the U.S. because they're regulated primarily at the state level, are efficient, and benefit from a flexible labor market.

Read the full article online at the Industry Market Trends website.