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https://doi.org/10.37043/JURA.2011.3.1.3
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Does an Efficient Business Regulatory Environment Matter at Urban Level? Some Evidence from Chinese Cities
[journal article]
Abstract It is widely acknowledged that firms require an efficient regulatory environment:
if transaction costs generated by business regulations are not onerous, firms grow more
and develop more quickly, attract more foreign direct investment, and employ more
workers. But what does it induce alterations ... view more
It is widely acknowledged that firms require an efficient regulatory environment:
if transaction costs generated by business regulations are not onerous, firms grow more
and develop more quickly, attract more foreign direct investment, and employ more
workers. But what does it induce alterations in the basic institutional framework? In this
paper we intend to test North’s thesis by which as trade expands and the size of the
market grows, transaction costs increase requiring that more and more resources should
be devoted to improving existing regulations and, then, reducing such costs. The paper
is structured as follows. Section 1 introduces. Section 2 provides the theoretical
background. Section 3, based on World Bank data on 30 Chinese cities, investigates
whether there is a correlation at urban and provincial levels between efficient business
regulations on one side and economic outcomes (gross domestic product, foreign direct
investment, employment, etc.) on the other. Section 4 addresses the pilot question
mentioned above and tests whether simpler and less costly ways of meeting legal
requirements for starting and running a business are associated with long-run trade.
Section 5 discusses results in the light of theoretically assumed causal links and proposes
a 2SLS regression model, whereby a geographical instrumental variable is used to
investigate the causal relationship between business regulations and exports.... view less
Keywords
China; town; enterprise; regulation; export; economic development (single enterprise); transaction costs; regional comparison; economic growth
Classification
Management Science
Free Keywords
business regulations; income levels; urban level
Document language
English
Publication Year
2011
Page/Pages
p. 27-43
Journal
Journal of Urban and Regional Analysis, 3 (2011) 1
ISSN
2067-4082
Status
Published Version; peer reviewed