Entrepreneurship Snapshots 2010: Measuring the Impact of the Financial Crisis on New Business Registration

World Bank

No 2537 in World Bank Publications - Books from The World Bank Group

Abstract: New businesses are likely to have been even more severely affected by the crisis than mature businesses, even in non crisis times, new and young firms tend to be more constrained than older firms which often have established reputations and enjoy easier access to finance. Given the sudden scarcity of credit and the uncertain economic outlook, it is reasonable to assume that entrepreneurs wanting to start a new business or register an existing informal business were hit especially hard by the downturn. Until now, however there has been a lack of comprehensive evidence to support this assumption. The impact of the 2008-09 financial crises on new business creation should be of special interest given the importance of entrepreneurs and young firms to the continued dynamism of the modern market economy; it is well established that a robust entry rate of new business can foster competition and economic growth. This report hypothesizes that although economies with more developed financial markets were hit harder by the crisis, they will enjoy stronger and quicker recoveries in new firm creation.

Keywords: Private; Sector; Development-E-Business; Private; Sector; Development-Business; Environment; Finance; and; Financial; Sector; Development-Banks; &; Banking; Reform; Private; Sector; Development-Business; in; Development; Environment-Environmental; Economics; &; Policies (search for similar items in EconPapers)
Date: 2011
ISBN: 978-0-8213-8476-3
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Citations: View citations in EconPapers (4)

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