Alternative Strategies For Firms In Oppressive And Corrupt States: Informality Or Formality Via Business Associations?
Abstract"Firms operating in oppressive conditions such as those in the transition countries often take advantage of informality, making unofficial payments to officials and underreporting their sales for tax purposes. This paper argues that business associations may constitute a more transparent, efficient, and formal alternative. Empirical support for the argument is provided based on firm level data on several thousand firms from the Business Environment and Enterprise Performance Surveys in 25 transitions countries for 2002 and 2005. We show that, despite their often rather bad reputation, business associations tend to play a rather positive role, helping firms to reduce both having to make unofficial payments and underreporting of sales for tax purposes."("JEL" D2, D7, L2, P2, P3) Copyright (c) 2009 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Contemporary Economic Policy.
Volume (Year): 27 (2009)
Issue (Month): 4 (October)
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Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
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- Prüfer, J., 2012.
"Business Associations and Private Ordering,"
2012-011, Tilburg University, Tilburg Law and Economic Center.
- Andrei Govorun, 2013. "The choice of lobbying strategy: direct contacts with officials or mediation via business associations," HSE Working papers WP BRP 24/EC/2013, National Research University Higher School of Economics.
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