From the paper age to the electronic age: an electronic business registry reform in Ecuador

Abstract

ABSTRACT This paper analyzes the short- and long-run effects of implementing an electronic business registry in Ecuador in September, 2014. Using a regression discontinuity in time (RDiT) design jointly with official administrative data, I find an increase in the short-run in the number of new formal firms that ranges from 14% to 18% depending on the outcome studied. In the long-run, the policy implementation increases the number of new formal firms by around 27%. For the entry rate outcome, the results are similar but in less magnitude. In particular, the impact of the policy implementation increases the entry rate by 9.10% in the short-run and 0.91% in the long-run. Overall, this paper supports the idea that reducing red tape and applying new technologies in business registries increase firm entry into the formal economy.