The Role of Regulation on Entry: Evidence from the Italian Provinces

Francesco Bripi

The World Bank Economic Review, 2016, vol. 30, issue 2, 383-411

Abstract: This paper studies the effects of differences in local administrative burdens in Italy in the years 2005–2007 preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, I explore the effects of regulatory barriers on the average of the annual entry rates across industries with different natural propensities to enter the market. The estimates of the cross-sectional analysis show that lengthier and, to some extent, more costly procedures reduced entry in sectors with naturally high entry. A one-day delay in registration procedures reduces the entry rate in highly dynamic sectors by more than 1 percent. These results hold when I include measures of local financial development and of efficiency of bankruptcy procedures.

Date: 2016
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Working Paper: The role of regulation on entry: evidence from the Italian provinces (2016)
Working Paper: The role of regulation on entry: evidence from the Italian provinces (2013)
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