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License To Sell : The Effect of Business Registration Reform On Entrepreneurial Activity in Mexico / Bruhn, Miriam
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Bruhn, Miriam
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Business entry.
- Business Environment.
- Business in Development.
- Business Registration.
- Business regulation.
- Businesses.
- Competitiveness and Competition Policy.
- E-Business.
- Economic development.
- Labor Policies.
- License.
- Private Sector.
- Private Sector Development.
- Public Sector Development.
- Results.
- Social Protections and Labor.
- Uses.
- Web.
- Local Subjects:
- Business entry.
- Business Environment.
- Business in Development.
- Business Registration.
- Business regulation.
- Businesses.
- Competitiveness and Competition Policy.
- E-Business.
- Economic development.
- Labor Policies.
- License.
- Private Sector.
- Private Sector Development.
- Public Sector Development.
- Results.
- Social Protections and Labor.
- Uses.
- Web.
- Physical Description:
- 1 online resource (54 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2008
- System Details:
- data file
- Summary:
- 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.
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