Sunday, August 08, 2010

The Impact of Business Entry Reforms

World Bank Group client governments as well as donors often ask about the effects of business entry reforms and the persistence of those effects. Four clear findings emerge from existing research:

First , more firms enter the market when registration procedures and costs are cut.
Second, a large percentage of new firms survive and grow.
Third, new firms increase competition, forcing incumbents to become more efficient or to exit the market and boosting overall productivity and investment .
Finally, entry reforms have greater impacts when coupled with other investment climate reforms.

Report summarizes studies of reforms in Colombia and Mexico's SARE (Sistema de Apertura
Rápida de Empresas).

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