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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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    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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