Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45057
Authors: 
Bennett, John
Year of Publication: 
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

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