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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 ()

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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 Format: application/pdf
File Function: First version, 2007
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Publisher 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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Related research
Keywords: Entry; Registration; Informal Sector; Program Evaluation;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Straub, Stéphane, 2005. "Informal sector: The credit market channel," Journal of Development Economics, Elsevier, vol. 78(2), pages 299-321, December. [Downloadable!] (restricted)
    Other versions:
  2. Aureo de Paula & Jose A. Scheinkman, 2006. "The Informal Sector," Levine's Bibliography 122247000000001030, UCLA Department of Economics. [Downloadable!]
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  3. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
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  4. Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," NBER Working Papers 8211, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Bruhn, Miriam, 2008. "License to sell : the effect of business registration reform on entrepreneurial activity in Mexico," Policy Research Working Paper Series 4538, The World Bank. [Downloadable!]
  6. Susan Athey & Scott Stern, 2000. "The Impact of Information Technology on Emergency Health Care Outcomes," NBER Working Papers 7887, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Kaplan, David & Martinez, Gabriel & Robertson, Raymond, 2005. "What Happens to Wages After Displacement?," MPRA Paper 3079, University Library of Munich, Germany. [Downloadable!]
  8. Simeon Djankov & Yingyi Qian & Gerard Roland & Ekaterina Zhuravskaya, 2005. "Who Are China’s Entrepreneurs?," Working Papers w0047, Center for Economic and Financial Research (CEFIR). [Downloadable!]
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  9. Djankov, Simeon & McLiesh, Caralee & Ramalho, Rita Maria, 2006. "Regulation and growth," Economics Letters, Elsevier, vol. 92(3), pages 395-401, September. [Downloadable!] (restricted)
  10. Simeon Djankov & Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "The Regulation Of Entry," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 1-37, February. [Downloadable!] (restricted)
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  11. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2005. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 83-120, February.
  12. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter. [Downloadable!] (restricted)
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  13. 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. [Downloadable!] (restricted)
  14. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  15. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June. [Downloadable!] (restricted)
  16. Friedrich Schneider & Dominik H. Enste, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March. [Downloadable!] (restricted)
  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.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Prantl, Susanne & Spitz-Oener, Alexandra, 2009. "How Does Entry Regulation Influence Entry into Self-Employment and Occupational Mobility?," IZA Discussion Papers 4221, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. McKenzie, David, 2009. "Impact assessments in finance and private sector development : what have we learned and what should we learn ?," Policy Research Working Paper Series 4944, The World Bank. [Downloadable!]
  3. Djankov, Simeon, 2008. "The Regulation of Entry: A Survey," CEPR Discussion Papers 7080, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. David McKenzie & Yaye Seynabou Sakho, 2007. "Does It Pay Firms to Register for Taxes? The Impact of Formality on Firm Profitability," IZA Discussion Papers 3179, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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