The effectiveness of entry deregulation: Novel evidence from removing minimum capital requirements

• 成果类型: Article
• 署名作者: Cheng, Hua; Ding, Siying; Liu, Yongzheng
• 署名单位: Zhongnan University of Economics & Law; University of International Business & Economics; Renmin University of China
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2024.103304
• 发表日期: 2024
• 关键词: Entry deregulation; Paid-in capital; Firm entry; job creation; Market dynamics

摘要

Although minimum paid -in capital requirements impede firm entry, governments worldwide have only recently started to reduce or remove such requirements. This study is among the first to examine the effectiveness of an entry deregulation reform in China that eliminated such requirements. We exploit city-year-month variation in reform implementation and employ a large nationwide administrative dataset of firm registrations, finding that the deregulation strongly encourages firm and job creation. Moreover, we find that the deregulation exerts a pro -competitive effect by encouraging the entry of small and medium-sized firms, private firms, and single -shareholder firms, which diversifies the industrial bases and reduces the industrial concentration of economic activity. Finally, we provide suggestive evidence that the deregulation promotes economic growth in the deregulated cities.