Publication: Does Business Registration Reform Increase Entrepreneurial Activity?
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Date
2009-02
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2009-02
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The second in new series of impact notes highlights an example of ex-past evolution of regulatory reform. While ideally one would like to build in an evolution strategy before a new policy is introduced, much can still be achieved ex-past in cases where existing data collection covers those affected by the policy.
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“Bruhn, Miriam. 2009. Does Business Registration Reform Increase Entrepreneurial Activity?. Finance & PSD Impact; No. 2. © World Bank. http://hdl.handle.net/10986/10262 License: CC BY 3.0 IGO.”
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Publication License to Sell : The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico(MIT Press, 2011-02)This paper estimates the economic effects of a recent reform that simplified business entry regulation in Mexico. The reform was introduced in different municipalities at different points in time. Using microlevel data, I find that the reform increased the number of registered businesses by 5%. This increase was due to former wage earners' opening businesses. Former unregistered business owners were not more likely to register their business after the reform. The reform also increased wage employment by 2.2%. Finally, the results imply that the competition from new entrants decreased the income of incumbent businesses by 3%.Publication License to Sell : The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico(World Bank, Washington, DC, 2008-02)This paper studies the effect of business registration regulation on economic activity using micro-level data. The identification strategy exploits the fact that a recent business registration reform in Mexico was introduced in different municipalities at different points in time. Using panel data from the Mexican employment survey, I find that the reform increased the number of registered businesses by 5 percent in eligible industries. This increase was due to former wage earners opening businesses. Former unregistered business owners were not more likely to register their business after the reform. Moreover, employment in eligible industries went up by 2.8 percent, and people who were previously unemployed or out of the labor force were more likely to work as wage earners after the reform. Finally, the results imply that the competition from new entrants lowered prices by 0.6 percent and decreased the income of incumbent businesses by 3.2 percent.Publication A Tale of Two Species : Revisiting the Effect of Registration Reform on Informal Business Owners in Mexico(2012-02-01)Different views have been put forward to explain why most firms in developing countries operate informally. One view argues that informal-business owners are entrepreneurs who do not register their firm because the regulation process is too complex. Another argues that informal-business owners are people trying to make a living while searching for a wage job. This paper contributes to recent literature that argues that both factors are at work. The author uses discriminant analysis to separate informal business owners into two groups: those with personal characteristics similar to wage workers, and those with traits similar to formal-business owners. The paper then examines how the two groups were affected by a business registration reform in Mexico. Informal-business owners from the second group were more likely to register their business after the reform. By contrast, informal-business owners from the first group were less likely to register but more likely to become wage workers after the reform. This is consistent with the finding in Bruhn (2008 and 2011) that the reform led to job creation. It also explains why the earlier papers find that the reform didn t affect the number of new registrations by all informal business owners.Publication A Tale of Two Species : Revisiting the Effect of Registration Reform on Informal Business Owners in Mexico(Elsevier, 2013-03-13)Some argue that informal business owners are viable entrepreneurs who do not register due to complex regulation. Others claim that they are making a living while searching for a job. This paper suggests that a mix of both views is correct. I separate informal business owners into those who have characteristics similar to wage workers and to formal business owners and study the impact of a business registration reform in Mexico on these two species. Informal business owners from the wage worker species are less likely to register due to the reform, but more likely to become wage workers since the reform created jobs. Informal business owners from the formal business owner species are more likely to register, but only in municipalities with high pre-reform constraints to formal entrepreneurship. These results explain why Bruhn, 2008 and Bruhn, 2011 finds no effect of the reform for all informal business owners taken together.Publication Courts and Business Registration(World Bank, Washington, DC, 2018-10)This paper studies the effects of a reform in Serbia that transferred business registration from regional courts to a centralized agency. Using administrative data, the analysis employs a difference-in-difference strategy that compares new firms before and after the reform across districts based on the level of distrust in regional courts. The results suggest that the reform increased the number of new firms more in regions with higher initial levels of distrust, by up to 34 percent. The reform also increased the survival rates of new firms. These effects are large compared to those of other types of registration reforms, suggesting that courts can pose significant barriers to new firm creation.
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At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. 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