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Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico

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Author Info

  • David Kaplan

    ()
    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

  • Eduardo Piedra
  • Enrique Seira

    ()

Abstract

There has been increasing concern that the difficulty of obtaining firm operation licences in developing countries may decrease firm creation and increase informality. We estimate the effect on new firm creation/registration of a program that speeds up firm registration procedures and makes them more transparent. The program was implemented in Mexico in different municipalities at different dates. Our preferred estimates suggest that new firm registration increased by around 4% in eligible industries. Most of the effect is temporary, being concentrated on the first 10 months after the program is implemented. This suggests that the program’s effect may operate through registering existing firms instead of spurring creation of new ones. We compare this magnitude to some benchmarks to assess its size.

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File URL: http://ftp.itam.mx/pub/academico/inves/kaplan/07-01.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 0701.

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Length: 46 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:cie:wpaper:0701

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Postal: Camino a Sta. Teresa 930, Mexico, D.F. 10700
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Fax: +525 628 4058
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Web page: http://cie.itam.mx/
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Keywords: Entry; Registration; Informal Sector; Program Evaluation;

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References

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  1. Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation ? Evidence from the French Retail Industry," Working Papers 2001-12, Centre de Recherche en Economie et Statistique.
  2. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
  3. Miriam Bruhn, 2011. "License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 382-386, February.
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  7. Djankov, Simeon & Qian, Yingyi & Roland, Gérard & Zhuravskaya, Ekaterina, 2006. "Who Are China's Entrepreneurs?," CEPR Discussion Papers 5706, C.E.P.R. Discussion Papers.
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  9. Straub, Stéphane, 2005. "Informal sector: The credit market channel," Journal of Development Economics, Elsevier, vol. 78(2), pages 299-321, December.
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  14. World Bank & International Finance Corporation, 2006. "Doing Business 2007 : How to Reform," World Bank Publications, The World Bank, number 7245, July.
  15. Kaplan, David S. & Piedra, Eduardo & Seira, Enrique, 2011. "Entry regulation and business start-ups: Evidence from Mexico," Journal of Public Economics, Elsevier, vol. 95(11), pages 1501-1515.
  16. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
  17. Susan Athey & Scott Stern, 2002. "The Impact of Information Technology on Emergency Health Care Outcomes," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 399-432, Autumn.
  18. Castellanos, Sara G. & Garcia-Verdu, Rodrigo & Kaplan, David S., 2004. "Nominal wage rigidities in Mexico: evidence from social security records," Journal of Development Economics, Elsevier, vol. 75(2), pages 507-533, December.
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  21. David Kaplan & Eduardo Piedra & Enrique Seira, 2007. "Are Burdensome Registration Procedures an Important Barrier on Firm Creation? Evidence from Mexico," Working Papers 0701, Centro de Investigacion Economica, ITAM.
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  1. Business registration and informality
    by Straub in Stephane Straub on 2012-03-20 09:12:11
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