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.
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| Format: | Journal Article biblioteca |
| Language: | en_US |
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American Economic Association
2013-04
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| Subjects: | firm behavior, firm performance, entrepreneurship, industrialization, manufacturing, service industries, technology, Microdata Set, |
| Online Access: | http://hdl.handle.net/10986/17927 |
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dig-okr-10986179272021-04-23T14:03:41Z The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka de Mel, Suresh McKenzie, David Woodruff, Christopher firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set 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. 2014-04-21T19:19:34Z 2014-04-21T19:19:34Z 2013-04 Journal Article American Economic Journal: Applied Economics 1945-7782 10.1257/app.5.2.122 http://hdl.handle.net/10986/17927 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo American Economic Association American Economic Association Publications & Research :: Journal Article Sri Lanka |
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firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set |
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firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set de Mel, Suresh McKenzie, David Woodruff, Christopher The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| description |
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. |
| format |
Journal Article |
| topic_facet |
firm behavior firm performance entrepreneurship industrialization manufacturing service industries technology Microdata Set |
| author |
de Mel, Suresh McKenzie, David Woodruff, Christopher |
| author_facet |
de Mel, Suresh McKenzie, David Woodruff, Christopher |
| author_sort |
de Mel, Suresh |
| title |
The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| title_short |
The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| title_full |
The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| title_fullStr |
The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| title_full_unstemmed |
The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka |
| title_sort |
demand for, and consequences of, formalization among informal firms in sri lanka |
| publisher |
American Economic Association |
| publishDate |
2013-04 |
| url |
http://hdl.handle.net/10986/17927 |
| work_keys_str_mv |
AT demelsuresh thedemandforandconsequencesofformalizationamonginformalfirmsinsrilanka AT mckenziedavid thedemandforandconsequencesofformalizationamonginformalfirmsinsrilanka AT woodruffchristopher thedemandforandconsequencesofformalizationamonginformalfirmsinsrilanka AT demelsuresh demandforandconsequencesofformalizationamonginformalfirmsinsrilanka AT mckenziedavid demandforandconsequencesofformalizationamonginformalfirmsinsrilanka AT woodruffchristopher demandforandconsequencesofformalizationamonginformalfirmsinsrilanka |
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