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Red tape and delayed entry

Author

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  • Papaioannou, Elias
  • Ciccone, Antonio

Abstract

Does cutting red tape foster entrepreneurship in industries with the potential to expand? We address this question by combining the time needed to comply with government entry procedures in 45 countries with industry-level data on employment growth and growth in the number of establishments during the 1980s. Our main empirical finding is that countries where it takes less time to register new businesses have seen more entry in industries that experienced expansionary global demand and technology shifts. Our estimates take into account that proxying global industry shifts using data from only one country-or group of countries with similar entry regulations-will in general yield biased results. JEL Classification: E6, F43, L16

Suggested Citation

  • Papaioannou, Elias & Ciccone, Antonio, 2007. "Red tape and delayed entry," Working Paper Series 758, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:2007758
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    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 1-37.
    2. Raymond Fisman & Virginia Sarria Allende, 2010. "Regulation of entry and the distortion of industrial organization," Journal of Applied Economics, Universidad del CEMA, vol. 13, pages 91-111, May.
    3. Andrei Shleifer, 2005. "Understanding Regulation," European Financial Management, European Financial Management Association, vol. 11(4), pages 439-451, September.
    4. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
    5. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12426.
    6. repec:hrv:faseco:30747190 is not listed on IDEAS
    7. repec:wbk:wbpubs:12425 is not listed on IDEAS
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    More about this item

    Keywords

    entry; entry regulation and globally expanding industries;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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