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The Role of Regulation on Entry: Evidence from the Italian Provinces

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  • Francesco Bripi
Abstract
This paper studies the effects of differences in local administrative burdens in Italy in the years 2005–2007 preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, I explore the effects of regulatory barriers on the average of the annual entry rates across industries with different natural propensities to enter the market. The estimates of the cross-sectional analysis show that lengthier and, to some extent, more costly procedures reduced entry in sectors with naturally high entry. A one-day delay in registration procedures reduces the entry rate in highly dynamic sectors by more than 1 percent. These results hold when I include measures of local financial development and of efficiency of bankruptcy procedures.

Suggested Citation

  • Francesco Bripi, 2016. "The Role of Regulation on Entry: Evidence from the Italian Provinces," The World Bank Economic Review, World Bank, vol. 30(2), pages 383-411.
    • Handle: RePEc:oup:wbecrv:v:30:y:2016:i:2:p:383-411.
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    File URL: http://hdl.handle.net/10.1093/wber/lhv063
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    3. Cheng, Hua & Ding, Siying & Liu, Yongzheng, 2024. "The effectiveness of entry deregulation: Novel evidence from removing minimum capital requirements," Journal of Development Economics, Elsevier, vol. 170(C).
    4. Ramalho,Rita & Saltane,Valentina, 2019. "Does Media Stimulate Reform Efforts ?," Policy Research Working Paper Series 8984, The World Bank.
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    6. Monica Amici & Silvia Giacomelli & Francesco Manaresi & Marco Tonello, 2015. "Red tape reduction and firm entry: evidence from an Italian reform," Questioni di Economia e Finanza (Occasional Papers) 285, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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