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Determinants of the Cost of Starting a Business in Mexico

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  • Rangel González Erick
  • Torre Cepeda Leonardo E.

Abstract

We construct a panel data at the state level in Mexico for the years 2006, 2008 and 2011 in order to investigate the impact that entry deregulation efforts have on the cost of opening new businesses in Mexico, where this cost is taken from the Doing Business in Mexico report of the World Bank. Using a model that the controls for the financial strength of the states, market profitability, regional fixed effects, and considering endogenous effects, we find that the measures of entry deregulation are strongly associated with a reduction in the cost of opening a new business.

Suggested Citation

  • Rangel González Erick & Torre Cepeda Leonardo E., 2014. "Determinants of the Cost of Starting a Business in Mexico," Working Papers 2014-25, Banco de México.
    • Handle: RePEc:bdm:wpaper:2014-25
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Deregulation; Cost of Opening New Businesses; GDP per capita;
    All these keywords.

    JEL classification:

    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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