The Effect of Business Regulations on Economic Growth (A Selection of Developed and Developing Countries)

اقتصاد و توسعه منطقه ای

Article 5, Volume 19, Issue 4, March 2013   

Document Type: مقالات پژوهشی

DOI: 10.22067/erd.v1391i3.20355

Author

Mohammad-Hossein Hosseinzade Bahreini^*

Abstract

The Effect of Business Regulations on Economic Growth (A Selection of Developed and Developing Countries)

Mohammad-Hossein Hosseinzade Bahreini
Assistant Professor of Economics,Ferdowsi University of Mashhad
Mohammad Ali Falahi
Associate Professor of Economics,Ferdowsi University of Mashhad
Fatemeh Erfany Jahanshahi
M.Sc. in Economics

Abstract
In this research, the relationship between business regulations and economic growth is examined.
Nowadays, firms face high regulation in starting business, employing production factors and other procedures of business. It seems one of the important obstacles of production and investment is cumbersome regulation in business environment. In different countries of the world, improvement in business environment and removal of obstacles in front of private sector are known as an economic strategy.
In this paper, regarding the importance of the subject, “Hardness of Business Regulations” index is made by using World Bank data for consideration of the effect of business regulations on economic growth. The model is estimated for 62 countries during 2003-2006 by panel data model. The result shows that hard business regulation has negative effect on economic growth in selected countries.

Key words: business environment, business regulations, economic growth, panel data.

JEL: C23, G18, K20

Keywords

business environment; business regulations; Economic Growth; Panel Data