Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126313
Authors: 
Boly, Amadou
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/038
Abstract: 
This paper examines the relationship between formalization and firm-level outcomes in Vietnam using a unique panel dataset. Results show that switching firms differ from informal nonswitching firms, confirming heterogeneity. We also find that becoming formal leads to increased profits, value added, and revenue. The performance of switching firms is higher than that of informal ones, but remains lower compared to non-switching formal firms. Our results suggest that the benefits of formalization materialize in the short term and persist over time. These benefits run through access to improved equipment, larger customer base, advertising, and business association membership, but not access to credit.
Subjects: 
benefits of formalization
informal sector
JEL: 
D21
O12
O17
ISBN: 
978-92-9230-923-7
Document Type: 
Working Paper

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