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http://hdl.handle.net/10419/45057
  
Title:Informal firms in developing countries entrepreneurial stepping stone or consolation prize? PDF Logo
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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