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Is there demand for formality among informal firms? Evidence from microfirms in downtown Lima
Besteht Nachfrage für Formalität unter informellen Firmen? Ergebnisse aus Mikrobetrieben im Stadtzentrum von Lima
[working paper]
Corporate Editor
Deutsches Institut für Entwicklungspolitik gGmbH
Abstract "Experimental data from microfirms in downtown Lima is exploited to analyse the demand for formality, i.e., obtaining an operating license. The results are paradoxical: most firms report greater disadvantages than advantages of being informal, yet when encouraged to obtain the license, only one out ... view more
"Experimental data from microfirms in downtown Lima is exploited to analyse the demand for formality, i.e., obtaining an operating license. The results are paradoxical: most firms report greater disadvantages than advantages of being informal, yet when encouraged to obtain the license, only one out of four firms takes up the incentive. Thus, for some firms formalisation may not be desirable at any cost. This is likely to be associated with the recurrent costs of being formal, the low perceived value of the benefits of formalisation, and the limited growth perspectives of these firms." (author's abstract)... view less
Keywords
formalization; productivity; license; business enterprise; Peru; industry; small business; town; enterprise; informal sector; South America; costs; developing country
Classification
Sociology of Developing Countries, Developmental Sociology
Sociology of Economics
Method
qualitative empirical; empirical
Document language
English
Publication Year
2008
City
Bonn
Page/Pages
21 p.
Series
DIE Discussion Paper, 12/2009
ISBN
978-3-88985-462-9
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne