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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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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. 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.
  2. Simeon Djankov & Yingyi Qian & Gérard Roland & Ekaterina Zhuravskaya, 2006. "Who Are China's Entrepreneurs?," American Economic Review, American Economic Association, vol. 96(2), pages 348-352, May.
  3. Toshihiko Mukoyama & Yoonsoo Lee, 2008. "Entry, Exit, and Plant-level Dynamics over the Business Cycle," 2008 Meeting Papers 454, Society for Economic Dynamics.
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  6. 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.
  7. Straub, Stéphane, 2005. "Informal sector: The credit market channel," Journal of Development Economics, Elsevier, vol. 78(2), pages 299-321, December.
  8. World Bank & International Finance Corporation, 2006. "Doing Business 2007 : How to Reform," World Bank Publications, The World Bank, number 7245, October.
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  10. Kaplan, David & Martinez, Gabriel & Robertson, Raymond, 2005. "What Happens to Wages After Displacement?," MPRA Paper 3079, University Library of Munich, Germany.
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  15. 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.
  16. 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.
  17. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
  18. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2002. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Working Papers 54, Universidad de San Andres, Departamento de Economia, revised Sep 2005.
  19. 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.
  20. Djankov, Simeon & McLiesh, Caralee & Ramalho, Rita Maria, 2006. "Regulation and growth," Economics Letters, Elsevier, vol. 92(3), pages 395-401, September.
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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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