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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]

Jaramillo, Miguel

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Further Details
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 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)
Keywords Peru; town; small business; informal sector; formalization; developing country; costs; license; business enterprise; industry; South America; enterprise; productivity
Classification Sociology of Economics; Sociology of Developing Countries, Developmental Sociology
Method empirical; qualitative 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 provider This metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne