Williams, C.C. orcid.org/0000-0002-3610-1933 and Kedir, A. (2016) Business Registration and Firm Performance: Some Lessons From India. Journal of Developmental Entrepreneurship, 21 (3). 1650016 . ISSN 1084-9467
Abstract
The aim of this paper is to evaluate the impacts on future firm performance of a firm deciding to register from the outset of its operations. Until now, the assumption has been that starting up registered is linked to higher future firm performance. Reporting World Bank Enterprise Survey (WBES) data collected in 2014 on 9,281 formal enterprises in India, and controlling for other determinants of firm performance as well as the endogeneity of the registration decision, the finding is that formal enterprises that start up unregistered and spend longer unregistered have significantly higher subsequent annual sales and employment growth rates compared with those registered from the outset. When the number of years spent unregistered is included, there are also productivity gains from delaying registration. The tentative explanation is that in this weak institutional environment, the advantages of registering from the outset are outweighed by the benefits of deferring registration. Evaluating the policy implications, the argument is that there is a need to shift away from the conventional eradication approach toward unregistered startups based on the assumption they are unproductive, and toward a more facilitating approach that improves the benefits of being registered and tackles the systemic formal institutional deficiencies that lead entrepreneurs to delay their decision to register.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2016 World Scientific Publishing. This is an author produced version of a paper subsequently published in Journal of Developmental Entrepreneurship. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Entrepreneurship; informal sector; venture creation; firm performance; India |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 23 Aug 2016 08:53 |
Last Modified: | 07 Sep 2017 23:12 |
Published Version: | http://dx.doi.org/10.1142/S1084946716500163 |
Status: | Published |
Publisher: | World Scientific Publishing |
Refereed: | Yes |
Identification Number: | 10.1142/S1084946716500163 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:103968 |