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The Effect of Ease of Doing Business on Firm Creation

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  • Tristan Canare

    (Department of Economics, Ateneo de Manila University)

Abstract

This paper looked at the effect of ease of doing business on firm creation. Using a nine-year panel data of about 120 countries from the World Bank's Ease of Doing Business Reports, results suggest that overall ease of doing business has a positive effect on business creation. This relationship is most strongly driven by the Starting a Business component, but Paying Taxes is also important. In addition, the effect of the Starting a Business component is driven by the financial cost rather than the time and administrative cost. Finally, results change when the analysis is applied to non-high-income countries only.

Suggested Citation

  • Tristan Canare, 2018. "The Effect of Ease of Doing Business on Firm Creation," Annals of Economics and Finance, Society for AEF, vol. 19(2), pages 555-584, November.
    • Handle: RePEc:cuf:journl:y:2018:v:19:i:2:canare
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    Cited by:

    1. Gerrit van der Waldt & David Fourie, 2022. "Ease of Doing Business in Local Government: Push and Pull Factors for Business Investment in Selected South African Municipalities," World, MDPI, vol. 3(3), pages 1-17, July.
    2. Victor Ushahemba Ijirshar & Joshua Kpelai Nomkuha & Benjamin Bem Bura & Joseph Tarza Sokpo & Mlumun Queen Ijirshar, 2023. "Ease of doing business and investment among West African countries," African Development Review, African Development Bank, vol. 35(2), pages 97-112, June.
    3. Saibal Ghosh, 2022. "Financing obstacles for SMEs: the role of politics," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 329-340, December.
    4. Huimin Liu & Yupeng Shi & Xuze Yang & Wentao Zhang, 2023. "The Role of Business Environment and Digital Government in Mitigating Supply Chain Vulnerability—Evidence from the COVID-19 Shock," Sustainability, MDPI, vol. 15(3), pages 1-15, January.
    5. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    6. Yusef Ali Yusef Yakubi & Basuki Basuki & Rudi Purwono & Indrianawati Usman, 2022. "The Impact of Digital Technology and Business Regulations on Financial Inclusion and Socio-Economic Development in Low-Income Countries," SAGE Open, , vol. 12(3), pages 21582440221, August.
    7. Nur Hayati Abd Rahman & Shafinar Ismail & Eeng Ahman & Aas Nurasyiah & Neni Sri Wulandari, 2021. "The effect of regulatory performance on economic growth," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 604-617, March.
    8. Martins, João & Veiga, Linda Gonçalves, 2022. "Digital government as a business facilitator," Information Economics and Policy, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    Ease of doing business; Cost of doing business; Firm creation; System GMM; Panel data;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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