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Westminster International University in Tashkent
The paper investigates the impact of corruption on the establishment of new enterprises through comparing the transition and developed economies. The objective of the paper is to study whether corruption has an impact on the number of new businesses registered per 1000 people, and to determine the factors which are significant and relative in predicting the number of new start-ups. Moreover, this paper aimed to propose various measures to eliminate the impact of corruption and help to make the business environment more favorable for potential investors and business owners. The assumption before conducting a research is that the impact of corruption is negative and significant in predicting firm entry. In order to test the hypothesis the method of fixed effect regression model is applied based on a sample of 16 transition and 30 developed countries over the period of 2006-2018. The results of the paper show that there is statistically significant negative impact of corruption on firm entry in transition economies, while the effect found to be insignificant for developed countries. Moreover, other factors that effects the start-ups have been examined as well, and found out that most of the variables, such as dealing with construction permits, paying tax, registering property and cost of starting a business are significant in transition economies and insignificant in developed countries, which may be due to the fact that developed countries have most favorable business environment for potential investors to establish new businesses and to operate efficiently in its further performances.
Graduate School - Westminster International University in Tashkent
