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

David Scott Kaplan (), Eduardo Piedra and Enrique Seira ()

No 701, Working Papers from Centro de Investigacion Economica, ITAM

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.

Keywords: Entry; Registration; Informal Sector; Program Evaluation (search for similar items in EconPapers)
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Date: 2007-01
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http://ftp.itam.mx/pub/academico/inves/kaplan/07-01.pdf First version, 2007 (application/pdf)

Related works:
Working Paper: Entry regulation and business start-ups : evidence from Mexico
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Persistent link: http://EconPapers.repec.org/RePEc:cie:wpaper:0701

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