Abstract
We use panel data on the number of new firm registrations in 95 countries to study the impact of the business environment and 2008 financial crisis on new firm creation. The data show that dynamic business creation occurs in countries that provide entrepreneurs with a stable legal and regulatory regime, fast and inexpensive business registration process, more flexible employment regulations, and low corporate taxes. The data also show that nearly all countries experienced a sharp drop in business entry during the crisis. This drop is more pronounced in countries with higher levels of financial development and countries more affected by the crisis.
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