The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka
A field experiment in Sri Lanka provides informal firms incentives to formalize. Information about the registration process and reimbursement of direct costs does not increase registration. Payments equivalent to one-half to one month (alternatively, two months) of the median firm's profits leads to registration of around one-fifth (alternatively, one-half ) of firms. Land ownership issues are the most common reason for not registering. Follow-up surveys 15 to 31 months later show higher mean profits, but largely in a few firms that grew rapidly. We find little evidence for other changes in behavior, but formalized firms express more trust in the state.
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Journal Article biblioteca |
| Language: | en_US |
| Published: |
American Economic Association
2013-04
|
| Subjects: | firm behavior, firm performance, entrepreneurship, industrialization, manufacturing, service industries, technology, Microdata Set, |
| Online Access: | http://hdl.handle.net/10986/17927 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|