The Regulation of Entry

51 Pages Posted: 8 Sep 2000 Last revised: 27 Jul 2022

See all articles by Simeon Djankov

Simeon Djankov

London School of Economics & Political Science (LSE); Peterson Institute for International Economics

Rafael La Porta

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Florencio Lopez-de-Silanes

SKEMA Business School; National Bureau of Economic Research (NBER)

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

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Date Written: September 2000

Abstract

We present new data on the regulation of entry of start-up firms in 75 countries. The data set contains information on 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 fewer entry regulations. The evidence is inconsistent with Pigouvian (helping hand) theories of benevolent regulation, but support the (grabbing hand) view that entry regulation benefits politicians and bureaucrats.

Suggested Citation

Djankov, Simeon and La Porta, Rafael and Lopez-de-Silanes, Florencio and Shleifer, Andrei, The Regulation of Entry (September 2000). NBER Working Paper No. w7892, Available at SSRN: https://ssrn.com/abstract=241382

Simeon Djankov (Contact Author)

London School of Economics & Political Science (LSE) ( email )

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Peterson Institute for International Economics ( email )

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Rafael La Porta

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

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Florencio Lopez-de-Silanes

SKEMA Business School ( email )

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France

National Bureau of Economic Research (NBER)

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Andrei Shleifer

Harvard University - Department of Economics ( email )

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United States
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HOME PAGE: http://www.economics.harvard.edu/~ashleife/

National Bureau of Economic Research (NBER)

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United States

European Corporate Governance Institute (ECGI)

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Belgium

HOME PAGE: http://www.ecgi.org

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