Title: The Impact of the Financial Crisis on New Firm Creation
Abstract: We use panel data on the number of new firm registrations in 95 countries to study the impact of the business environment and 2008-09 financial crisis on new firm creation. The data show that dynamic business creation occurs in countries that provide entrepreneurs with a stable legal and regulatory regime, fast and inexpensive business registration, low employment rigidity, and low corporate taxes. The data also show that nearly all countries experienced a sharp drop in business entry during the crisis, however, this drop was more pronounced in countries with more developed financial markets. In addition, the degree to which the crisis impacted new firm creation is correlated with measures of crisis severity. These results can guide effective policymaking and deliver new capabilities for identifying the impact of reforms.
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 5
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