Impact Assessment

The Impact of Business Environment Reforms on New Firm Registration, Leora Klapper, Inessa Love (The World Bank ), 2010

    The authors use panel data on the number of new firm registrations in 92 countries to study how the magnitude of reforms affects new firm registrations.

    They find that small reforms, in general less than 40 percent reduction in costs, days, or procedures required for business registration, do not have a significant effect on new firm creation. This suggests that small reforms do not have the intended effect on private sector development.

    They also find important synergies in multiple reforms of two or more business environment indicators.

    Finally, they show that countries with relatively weaker business environments require relatively larger reforms in order to impact new firm growth. These results can be helpful to motivate policymakers to make larger, broader reforms.

    The publication can also be found on the Entrepreneurship Website of the World Bank Development Research Group.