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Entrepreneurship and Economic Development: Leora F. Klapper & Juan Manuel Quesada Delgado
Entrepreneurship and Economic Development: Leora F. Klapper & Juan Manuel Quesada Delgado
Entrepreneurship and Economic Development: Leora F. Klapper & Juan Manuel Quesada Delgado
Why a dataset on entrepreneurship? To answer the demand of Governments and Policy Makers: Diagnosis of private sector Monitoring and Evaluation of policies Study the impact of regulatory, political, and macroeconomic institutional changes To better understand what drives entrepreneurs to transition from the informal to the formal sector How can greater formal sector participation / corporate registration be encouraged
How?
Goal:
To gather comparable data at the international level using a methodology that can be applied across heterogeneous legal, economical and political systems.
Questions:
What do we measure? How do we measure it? Where do we measure? Sources of information
Motto
What do we measure?: Entrepreneurial Activity The activities of an individual or a group of individuals aimed at initiating economic activities in the formal sector under a legal form of business.
How do we measure?
Unit: Business
Any economic unit of the formal sector incorporated as a legal entity and registered in a public registry, which is capable, in its own right, of incurring liabilities and of engaging in economic activities and transactions with other entities.
Where do we count?
New Economic Units Formal Sector Self Employment
Informal Sector
Micro Businesses
Civil Law
Common Law
Sole Proprietorship
Companies
Companies
Partnerships
Sole Proprietorship
New Businesses
Information source
The business Registries
Reasons: Its the first step to enter the formal sector They tend to be the source of information for other government agencies Challenges: Differences in registration and annual filing requirements; identification of exited firms; re-registrations; paper based registries and decentralized registry systems.
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000
1995
1996
1997
1998
1999
2000
2002
2003
Survey Structure
Panel A: Total and new registrations recorded: - Total firms - New firms - Year-end 2000-05 Panel B: Number of corporations, by sector and size: - By sector: Manufacturing, Services, Financial, Wholesale & Retail Trade Panel C: The Role of Corporate Registries:
Entry rates
12%
10.0%
9%
8.7% 6.2%
6%
3.1%
3%
1.4% 0.2%
0% Africa and Middle East Asia Europe and Central Asia Latin America and the Caribbean Industrialized Countries
19
20
10
29
49
40%
30%
20%
10%
0% Wholesale & Retail Trade Finance Insurance & Real Estate Industry Services
Industry
Services
80%
60%
40%
20%
0%
Canada
Madagascar
patents
30%
20%
10%
0% Africa and Middle East Europe and Central Asia Latin America and the Caribbean Asia Industrialized countries
Firms closures
80%
60%
40%
20%
0% Africa and Middle East Europe and Central Asia Latin America and the Caribbean Asia Industrialized countries
Is e-registration required?
60%
40%
20%
0%
Asia
Industrialized countries
Is there a fee?
80%
60%
40%
20%
0%
Africa and Middle East Europe and Central Asia Latin America and the Caribbean Asia Industrialized countries
With e-registration
10% 8%
Without e-registration
Entry rates
6% 4% 2% 0%
Asia
Industrialized Countries
With e-registration
6%
Without e-registration
Business density
5% 4% 3% 2% 1% 0% Africa and Middle East Asia Industrialized Countries Europe and Central Latin America and the Asia Caribbean
Without e-registration
41
40
32
30 20
7.7
10 0
10
18.9
15
9.0
10
2.3
5
Guatemala
40000 30000 20000
Sri Lanka
Jordan
EBR Implementation
10000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
2000 0
EBR implementation
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Scatter Plots
GDP per capita
Entry rate
20
15
10
10
5
5
Governance
Entry rate (percent)
10
5 0 60
-2
Multivariate Test
Business Density Rates Log of GDP per capita GDP growth Cost to start a business Governance index (Kauffman, et al.) Constant Observations R-squared -8.930 [0.00]*** 80 0.26 1.426 [0.00]*** 0.191 [0.32] 0.614 [0.05]* 0.681 [0.06]* 1.093 [0.00]*** 0.286 [0.04]**
Additional Information
Data Base Research paper: Entrepreneurship: New Data on Business Creation and How to Promote It Viewpoint: Entrepreneurship and firm formation across countries
Contacts:
Leora Klapper: lklapper@worldbank.org
Juan Manuel Quesada: jmquesada@worldbank.org