The impact of regulation on growth and informality - cross-country evidence

By Norman V. Loayza, Ana Maria Oviedo, L. Serven. 2005

269 citations recorded by the source corpus.

The authors study the effects of regulation on economic growth and the relative size of the informal sector in a large sample of industrial and developing countries. Along with firm dynamics, informality is an important channel through which regulation affects macroeconomic performance and economic growth in particular. The authors conclude that a heavier regulatory burden-particularly in product and labor markets-reduces growth and induces informality. These effects are, however, mitigated as the overall institutional framework improves.

Subfields: Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/bd93798c1254e6967249a788538ac42b38dcd24e

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Citations in the corpus

License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico (2008, unknown): “1 For example, Loayza, Oviedo, and Servén (2005) and Djankov, McLiesh, and Ramalho (2006) provide evidence that countries with less regulation grow faster.”
Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms (2009, background): “A number of studies have focused on cross-country variation to identify the effect of labor regulations (Botero et al. 2004; Heckman and Pagés 2004), regulation of entry (Djankov et al. 2002), or a wide set of regulations (Loayza, Oviedo, and Servén 2006).”
Entrepreneurship and firm formation across countries (2007, unknown): “However, many countries requiring businesses to file certain data lack the ability to enforce compliance.”
Financial Development and the Underground Economy (2013, background): “Since Mansfield’s (1963) seminal contribution, economists have attempted to study not only the dynamics of inter-firm rates of diffusion (technology diffusion between firms) but also intra-firm rates of adoption of new technologies (technology diffusion within a firm).”
Microenterprise Dynamics in Developing Countries : How Similar are They to Those in the Industrialized World? Evidence from Mexico (2006, unknown): “Maloney (2001), explaining the variance in figure 1, and Loayza, Oviedo, and Serven (2005), explaining cross-country variance in levels of informality more generally, find statistically significant impacts of labor regulation, but the level of development plays a much larger explanatory role.”