The Regulation of Entry
London School of Economics & Political Science (LSE); Peter G. Peterson Institute for International Economics
Rafael La Porta
Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)
Florencio Lopez de Silanes
EDHEC Business School; National Bureau of Economic Research (NBER)
Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)
CEPR Discussion Paper No. 2953
We present new data on the regulation of entry of start-up firms in 85 countries. The data covers the number of procedures, official time, and official cost that a start-up must bear before it can operate legally. The official costs of entry are extremely high in most countries. Countries with heavier regulation of entry have higher corruption and larger unofficial economies, but not better quality of public or private goods. Countries with more democratic and limited governments have lighter regulation of entry. The evidence is inconsistent with public interest theories of regulation, but supports the public choice view that entry regulation benefits politicians and bureaucrats.
Number of Pages in PDF File: 52
Keywords: Regulation, business entry
JEL Classification: H10, K20, L50
Date posted: September 25, 2001
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