The Impact of Business Environment Reforms on New Firm Registration’. World Bank Policy Research Working Paper 5493

Abstract: This paper uses panel data on the number of new firm registrations in 92 countries to study how the ease of registering a business and the magnitude of registration reforms affect new firm registrations. We find that the costs, days and procedures required for starting a business are important predictors of new firm registration. However, we find that small reforms, in general less than a 40 percent reduction in costs, days, or procedures, do not have a significant effect on new firm creation. We also find important synergies in multiple reforms of two or more business environment indicators. Finally, we show that countries with relatively weaker business environments prior to reforms require relatively larger reforms in order to impact the number of newly registered firms