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| Title: | | Informal firms in developing countries entrepreneurial stepping stone or consolation prize?  |
| Authors: | | Bennett, John |
| Issue Date: | | 2009 |
| Series/Report no.: | | Research paper / UNU-WIDER 2009.19 |
| Abstract: | | We analyse potential dynamic benefits for a firm from having the option of adopting informal status. Informality may be a stepping stone, without which formality might never be achieved. This result obtains for a broad range of realistic parameter values, suggesting a potential dynamic case for government support of informal firms. Informality may alternatively play a converse role as a consolation prize, a firm only entering an industry (formally) because it recognizes that if profitability is disappointing, it can switch to informality. However, this result obtains for a range of parameter values so narrow to be of no practical significance. |
| Subjects: | | informality entrepreneurship |
| JEL: | | O17 M21 D2 |
| ISBN: | | 978-92-9230-188-0 |
| Document Type: | | Working Paper |
| Appears in Collections: | | WIDER Research Papers, United Nations University (UNU)
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