Law Enforcement on Time to Doing Business and Economic Welfare
| Author | Bernard Nainggolan - Wilson Rajagukguk - Hulman Panjaitan |
| Position | Faculty of Law, Universitas Kristen Indonesia, Jakarta - Faculty of Economics and Business, Universitas Kristen Indonesia, Jakarta - Faculty of Law, Universitas Kristen Indonesia, Jakarta |
| Pages | 177-181 |
Vo
l.
6
N
o
. 1
M
arch, 2020
ISS
N 2410-391
8
A
cces on
l
ine at www.ii
p
cc
l
.or
g
17
7
A
cademic Journal o
f
Business,
A
dministration, Law and Social Sciences
II
PCCL Publishin
g
, Graz-
A
ustria
Law En
f
orcement on Time to Doin
g
Business and Economic Wel
f
are
Bernard Nain
gg
ola
n
F
aculty o
f
Law,
U
niversitas Kristen
I
ndonesia, Jakarta
Wi
l
son Ra
j
agu
k
gu
k
F
aculty o
f
E
conomics and Business,
U
niversitas Kristen
I
ndonesia, Jakarta
H
u
l
man Pan
j
aitan
F
aculty o
f
Law,
U
niversitas Kristen
I
ndonesia, Jakarta
Abs
tr
ac
t
T
ime is an asset of a company and household. Saving time is a profi t to company and brings
welfare to household and individual. Time to doing business must be regulated in law in
order to produce optimum benefi t for welfare. This study aims to investigate the impact of
time to doing business on economic welfare. The data used in this study came from the World
D
evelopment
I
ndicators of the World Bank in 2020 that covered 176 countries during 2005
to 2017. The dependent variable is the welfare variable, that is GDP per capita (PPP, current
i
nternational, in US$). The independent variable is the time to doing business that includes
time to prepare and pay taxes (hours), time required to start a business, male (days), andtime
r
equired to register property (days).
A
nother independent variable is the in
f
rastructure
v
ariable that is access to electricity (% of population). The data were analyzed employing a
r
andom e
ects regression model
f
or panel data. The results o
f
the study show that the three
time variables which are the time to prepare and pay taxes, time required to start a business,
a
nd time required to register property,have negative e ects on economic welfare, while access
has a positive e ect. These results imply that policy makers should issue law and regulation so
that time to doing business can be speeded up for the sake of economic welfare.
Ke
y
words
:
Welfare, Time to doin
g
business, Panel data, Random e ect, Law.
JE
L: K42,
O
12, P16
I
ntr
odu
ct
io
n
T
ime is an asset.
A
n entre
p
reneur in a low-income econom
y
s
p
ent 50%
p
er ca
p
ita
i
ncome to
l
aunc
h
a com
p
an
y
, com
p
are to on
ly
4.2%
p
er ca
p
ita income in
h
ig
h-
i
ncome econom
y
(Wor
ld
Ban
k
, 2020
b
). Time to construct,
p
ro
d
uce, an
d
inventor
y
h
as
i
m
p
ortant im
p
lications in determining asset
p
rice and
q
uantit
y
d
y
namic in general
eq
ui
l
i
b
rium mo
d
e
l
(C
h
en 2016).
Th
e
l
onger t
h
e time nee
d
e
d
to
p
ro
d
uce, t
h
e greater t
h
e resources nee
d
e
d
in a
b
usiness.
T
ime to building ca
p
tures the dela
y
in the trans
f
ormation o
f
new investment into
p
ro
d
uctive ca
p
ita
l
. Time to
p
ro
d
ucing ca
p
tures t
h
e
d
e
l
a
y
in ca
p
ita
l
p
ro
d
uctive
trans
f
ormation into out
p
ut. Both dela
y
s increase the risk o
f
a business.
I
n a given
i
ncom
p
lete
f
actor market, an a
pp
ro
p
riate time
p
ath o
f
fl
ows o
f
variables must be built
up
in
d
etermining asset stoc
k
. Time is a resource t
h
at must
b
e ta
k
en into account
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