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

Author

Listed:
  • 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.

Suggested Citation

  • 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.
  • Handle: RePEc:cie:wpaper:0701
    as

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    File URL: http://ftp.itam.mx/pub/academico/inves/kaplan/07-01.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Entry; Registration; Informal Sector; Program Evaluation;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

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