The Impact of Firm Entry Regulation on Long-living Entrants

Susanne Prantl ()
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Susanne Prantl: Max Planck Institute for Research on Collective Goods, Bonn

No 2010_30, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: What is the impact of firm entry regulation on sustained entry into self-employment? How does firm entry regulation influence the performance of long-living entrants? In this paper, I address these questions by exploiting a natural experiment in firm entry regulation. After German reunification, East and West Germany faced different economic conditions, but fell under the same law that imposes a substantial mandatory standard on entrepreneurs who want to start a legally independent firm in one of the regulated occupations. The empirical results suggest that the entry regulation suppresses long-living entrants, not only entrants in general or transient, short-lived entrants. This effect on the number of long-living entrants is not accompanied by a counteracting effect on the performance of long-living entrants, as measured by firm size several years after entry.

Keywords: Firm entry regulation; sustained entry; self-employment; firm size (search for similar items in EconPapers)
JEL-codes: K20 L25 L26 L50 M13 P52 (search for similar items in EconPapers)
Date: 2010-07
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent, nep-ind, nep-law and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2010_30

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