This document summarizes the results of the International Business Registers Survey on business dynamics in over 40 countries from 2007-2015. It finds that business entry rates vary substantially across economies and over time. Business entry is generally higher when business registration procedures are easier, including shorter processing times, fewer required documents, lower capital requirements and fees, and the ability to register online. However, mandatory e-filing is associated with faster processing but lower entry rates. The survey also shows that business exit rates are often underestimated, indicating shortcomings in monitoring business operational status after registration. Improving the collection and use of updated post-registration business data could help incentivize formalization and provide valuable market information, but more research is needed on balancing

1. Business Dynamics – Insights from the
International Business Registers Survey
Christine Zhenwei Qiang
Trang Tran
Investment Climate, Trade & Competitiveness
Global Practice, World Bank Group

2. Outline
2
Business Environment at a Glance
Supporting the Collection and Use of Quality Business Data
Results on Business Dynamics

3. Outline
3
Business Environment at a Glance
Supporting the Collection and Use of Quality Business Data
Results on Business Dynamics

4. Business Environment at a Glance
4
Business Environment
Reform Agenda
Internationalization
Business Expansion &
DiversificationBusiness Operations
Entry & Formalization

5. 5
Pillars of Business Environment

6. Support to Business Entry Reforms
6
4 Projects
2 Projects
3 Projects
5 Projects
3 Projects 26 Projects
Currently we are working on 100+ projects in over 90 countries,
of which over 40 business entry reform projects are active.

7. WBG and CRF/ECRF Collaboration
7
Sharing good international practice and expertise
Collaboration on technical and policy assistance
Joint data and research agenda
• Partnering with business registries to analyze the impact of reforms on
business dynamics.
• Leveraging WBG relationships with business registries in developing
countries for CRF survey.

8. Outline
8
Business Environment at a Glance
Supporting the Collection and Use of Quality Business Data
Results on Business Dynamics

9. International Business Registers Survey
9
Coverage
• 2007-2015
• 40+ developed & developing countries each year
… Snapshots of
• The working of business registries around the world
• Firm entry and survival dynamics
• How firms entry is related to registration procedures

10. Business Dynamism Varies Substantially Across Economies
10
0 20 40 60 80
Total entry density
Pakistan
Sri Lanka
Canada, federal
Austria
Spain, association
Ireland
Lithuania
Croatia
Macedonia
France
Switzerland
Finland
Romania
Serbia
Norway
Latvia
Sweden
Italy
United Kingdom
Slovenia
Botswana
Singapore
Australia
Malaysia
Denmark
Netherlands
Estonia
Luxembourg
Hong Kong
New Zealand
Isle of Man
Liechtenstein
Gibraltar
Total entry density is defined as number of new company registrations per 1000 inhabitants.
Total entry density excludes top and bottom 1%.
Included are countries that report at least one value for each period 2007-2008, 2009-2011, 2012-2015.
Total Entry Density
2007-2015

11. And Over Time
11
0
20406080
Gibraltar
IsleofMan
Luxembourg
NewZealand
HongKong
Denmark
Liechtenstein
Netherlands
Malaysia
Singapore
Estonia
Botswana
Serbia
Italy
Australia
Sweden
Norway
Romania
UnitedKingdom
Finland
Macedonia
France
Latvia
Slovenia
Switzerland
Croatia
Ireland
Lithuania
Spain,association
Austria
Canada,federal
SriLanka
Pakistan
Total entry density is defined as number of new company registrations per 1000 inhabitants.
Total entry density excludes top and bottom 1%.
Included are countries that report at least one value for all three sub periods.
Total Entry Density
2007-2008 2009-2011
2012-2015

12. Large, consistent gaps between entry and exit rates indicates
underestimation of business terminations in many countries
12
0 20 40 60
Kosovo
Hong Kong
Gibraltar
New Zealand
Albania
Cook Islands
Sri Lanka
Qatar
Botswana
Singapore
United Kingdom
Mongolia
Slovenia
Russia
Serbia
Australia
Azerbaijan
Estonia
Mauritius
Canada, federal
Hungary
Netherlands
Denmark
Colombia
Guernsey
India
Montenegro
Ireland
Austria
Georgia
Isle of Man
Croatia
Switzerland
Latvia
Norway
France
Jersey
Luxembourg
Italy
Pakistan
Romania
Malaysia
Liechtenstein
Sweden
Macedonia
Belgium
Finland
Lithuania
Lesotho
Israel
Germany
Moldova
Spain, association
Czech Republic
Entry/exit rate is defined as number of new company registrations/terminations
over the stock of all business
Entry rate Exit rate

13. Ease of registration is associated with higher entry
13
Business entry is higher where processing time is faster
1
1.5
2
2.5
3
0 5 10 15
Average time to process application for company formation (in workdays)
Total entry density: exclude top and bottom 1%.
Binned scatterplots: average entry by 1st-20th quantiles of processing time.
20th quantile:
Average entry density = 1.3
Average processing time = 13.2

14. Countries with Longest Processing Time in Sample
14
HRV2014
DNK2009
FIN2010FIN2011
FIN2013
FIN2014
FIN2015
NOR2007
SWE2007
SWE2009SWE2010
SWE2011
SWE2012
HRV2014
DNK2009
FIN2010FIN2011 FIN2013 FIN2014 FIN2015MNG2015
NOR2007
SWE2007
SWE2009
SWE2010
SWE2011SWE2012
012345
10 15 20 25
Average time to process application for company formation (in workdays)
Sole traders Private LLCs

15. Ease of registration is associated with higher entry
15
Business entry is higher where fewer documents are required
1
1.5
2
2.5
3
0 5 10 15
Total count of documents required to incorporate a new company
Total entry density: exclude top and bottom 1%.
Binned scatterplots: average entry by number of documents.

16. Ease of registration is associated with higher entry
16
0246
0 500 1000 1500
Minimum Share of Capital (as % of GDP per capita)
Total entry density: exclude top and bottom 1%.
Excludes Zambia.
01234
Totalentrydensity(per1000inh.)
0 .02 .04 .06
Incorporation fee (% of GDP per capita)
Total entry density: exclude top and bottom 1%.
Excludes top 1% of inforporation fees
Business entry is higher where capital requirements and incorporation
fees are lower

17. Ease of registration is associated with higher entry
17
Business entry is higher where it is possible to register online
0
.5
1
1.5
2
2.5
Not possible to completely register online.Possible to completely register online.
Total entry density excludes top and bottom 1%.
p-value of mean differences test: .00102239

18. Interestingly, mandatory e-filing is associated with faster processing time,
but lower entry rates
18
0
.5
1
1.5
2
e-filing not mandatory e-filing mandatory
p-value of mean differences test: .16106393 05
101520
Entryrate(%)
E-filing not mandatory. E-filing mandatory.
Excludes countries where it is not possible to completely register online.
Entry rate excludes top and bottom 1%.
p-value of mean differences test: .62905265

19. Summary
19
We observe very different business entry dynamics across countries and over
time but:
• Entry generally increases with ease of business registration, including time,
documentary burden, the ability to use online system and cost.
There are trade-offs in using e-registers to reduce registration burdens.
Exits are not accurately captured, implying shortcomings in monitoring business
operational status.

20. Outline
20
Business Environment at a Glance
Supporting the Collection and Use of Quality Business Data
Results on Business Dynamics

21. Reducing Cost of Establishing a Business Matters, But…
21
Business registries can also support entry through providing valuable market
information to improve formalization benefits
Yet, the survey reveals that
• Post-registration data are not always utilized;
• At the same time, the quality of the information on businesses might fall short
of providing relevant data for decision making: business information is not
always up to date e.g. business termination is not reported systematically,
financial information is not always collected.
Questions remain on how to balance the costs and benefits of efforts to improve
information quality collected by business registries:
• Regular updates of business status;
• Annual submission of accounts information;
• Sharing information with other agencies & the public.

22. Pilots to Incentivize Collection/Use of Registration Data
22
In Bangladesh:
• Low level of post-registration compliance (20%);
• Experiment with mechanisms to incentivize firms to submit
financial statements;
• Use information of newly registered firms to promote
business-to-business linkages and open new financing
opportunities.

23. 23
… for Evidence-Based Policy Making

24. Concluding Remarks
24
Ease of entry, including efficiency of business registries, matter for
business entry.
Post-registration data on businesses are still not widely captured and
utilized.
Promising agenda for collaboration: identify best practice and support
developing countries for better collection & use of business registration
data.

25. Thank You