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The Role of Regulation on Entry: Evidence from the Italian Provinces

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  • Francesco Bripi

Abstract

This paper studies the effects of differences in local administrative burdens in Italy in the years 2005–2007 preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, I explore the effects of regulatory barriers on the average of the annual entry rates across industries with different natural propensities to enter the market. The estimates of the cross-sectional analysis show that lengthier and, to some extent, more costly procedures reduced entry in sectors with naturally high entry. A one-day delay in registration procedures reduces the entry rate in highly dynamic sectors by more than 1 percent. These results hold when I include measures of local financial development and of efficiency of bankruptcy procedures.

Suggested Citation

  • Francesco Bripi, 2016. "The Role of Regulation on Entry: Evidence from the Italian Provinces," The World Bank Economic Review, World Bank, vol. 30(2), pages 383-411.
    • Handle: RePEc:oup:wbecrv:v:30:y:2016:i:2:p:383-411.
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    File URL: http://hdl.handle.net/10.1093/wber/lhv063
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    Cited by:

    1. Guo, Meng & Luo, Danglun & Liu, Chen, 2024. "City civilization, employment creation and talent agglomeration: Empirical evidence from “National Civilized City” policy in China," China Economic Review, Elsevier, vol. 87(C).
    2. Brixiova, Zuzana & Égert, Balázs, 2017. "Entrepreneurship, institutions and skills in low-income countries," Economic Modelling, Elsevier, vol. 67(C), pages 381-391.
    3. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D�Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo , 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
    4. Cheng, Hua & Ding, Siying & Liu, Yongzheng, 2024. "The effectiveness of entry deregulation: Novel evidence from removing minimum capital requirements," Journal of Development Economics, Elsevier, vol. 170(C).
    5. Ramalho,Rita & Saltane,Valentina, 2019. "Does Media Stimulate Reform Efforts ?," Policy Research Working Paper Series 8984, The World Bank.
    6. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    7. Monica Amici & Silvia Giacomelli & Francesco Manaresi & Marco Tonello, 2015. "Red tape reduction and firm entry: evidence from an Italian reform," Questioni di Economia e Finanza (Occasional Papers) 285, Bank of Italy, Economic Research and International Relations Area.
    8. Segundo Camino-Mogro & Juan Manuel Dominguez & María Auxiliadora Guzman, 2025. "From lower levels of formality to a formal firm in Ecuador: Short-run evidence," Economics Bulletin, AccessEcon, vol. 45(1), pages 668-677.

    More about this item

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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