Red tape reduction and firm entry: New evidence from an Italian reform

- We estimate the effects of a reduction in the red tape costs on firm demographics.
- We exploit a reform of the One-stop shops (OSS) for doing business in Italy.
- The reform reduced the time component of the start-up cost by improving ICT capabilities of the OSS.
- Entry rates increased; survival rates of new entrants improved.
- The effects were concentrated among sole-proprietor firms.

We study the impact of a simplification in bureaucratic procedures for starting up a business on firm demographics by exploiting the staggered implementation of a reform. We find that both entry rates and survival probability of new entrants increased.