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

(970 KByte)

Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-194177

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
Document Type	working paper
data provider	This metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne