The Impact of Business Environment Reforms on New Firm Registration

32 Pages Posted: 20 Mar 2011  

Leora F. Klapper

World Bank; World Bank - Development Research Group (DECRG)

Inessa Love

World Bank - Development Economics Data Group (DECDG)

Multiple version iconThere are 2 versions of this paper

Date Written: March 15, 2011

Abstract

This paper uses panel data on the number of new firm registrations in 92 countries to study how the ease of registering a business and the magnitude of registration reforms affect new firm registrations. We find that the costs, days and procedures required for starting a business are important predictors of new firm registration. However, we find that small reforms, in general less than a 40 percent reduction in costs, days, or procedures, do not have a significant effect on new firm creation. We also find important synergies in multiple reforms of two or more business environment indicators. Finally, we show that countries with relatively weaker business environments require relatively larger reforms in order to impact new firm growth. These results can be helpful to motivate policymakers to make larger, broader reforms.

Keywords: Entrepreneurship, Economic Development, Business Environment, Reforms

JEL Classification: G18, G38, L51, M13

Suggested Citation

Klapper, Leora F. and Love, Inessa, The Impact of Business Environment Reforms on New Firm Registration (March 15, 2011). Available at SSRN: https://ssrn.com/abstract=1786802 or http://dx.doi.org/10.2139/ssrn.1786802

Leora F. Klapper (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-8738 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/lklapper

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Inessa Love

World Bank - Development Economics Data Group (DECDG) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/ilove

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