License to Sell : The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico

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.

Bibliographic Details

Main Author:	Bruhn, Miriam
Language:	English
Published:	World Bank, Washington, DC 2008-02
Subjects:	ACCOUNT, ADMINISTRATIVE DATA, BARRIERS TO ENTRY, BEST PRACTICES, BUSINESS ENTRY, BUSINESS REGISTRATION, BUSINESS REGULATION, BUSINESS SECTOR, BUSINESSES, CALCULATION, CHECKS, COMMERCE, CONSUMER, CONSUMERS, CUSTOMER BASE, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMICS, EMPLOYMENT GROWTH, EMPLOYMENT OPPORTUNITIES, GLOBAL ECONOMY, ICT, INCOME, INCOME INCREASES, INCOMES, INCREASE IN INCOME, INTERNATIONAL COMPARISON, JOB CREATION, LABOR DEMAND, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR MARKET, LABOR MARKETS, LABOR REGULATIONS, LABOR SUPPLY, LICENSE, LICENSES, LOCAL BUSINESS, MEDICAL INSURANCE, MISSING DATA, MONTHLY INCOME, MOTIVATION, NEW ENTREPRENEURS, NEW JOBS, OCCUPATIONS, PRICE INDEX, PRIMARY EDUCATION, PRIVATE SECTOR, PRODUCTIVITY, REAL INCOME, RECORD KEEPING, REGISTRIES, REGISTRY, RESULT, RESULTS, RETAIL STORES, RETAIL TRADE, SECONDARY EDUCATION, SELF-EMPLOYMENT, SOCIAL SECURITY, SUPPORT PROGRAMS, TIME PERIOD, TIME PERIODS, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNEMPLOYMENT STATISTICS, UNPAID WORKERS, USES, VALUABLE, VIDEO, VIDEO GAME, WAGE, WEB, WORKING AGE,
Online Access:	http://documents.worldbank.org/curated/en/2008/02/9043810/license-sell-effect-business-registration-reform-entrepreneurial-activity-mexico https://hdl.handle.net/10986/6596
Tags:	Add Tag No Tags, Be the first to tag this record!