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Firm Dynamics and Institutional Participation: A Case Study on Informality of Micro Enterprises in Peru

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  • Jackle, Annette E
  • Li, Carmen A

Abstract

Using panel data on micro enterprises from Peru we find evidence suggesting that firm dynamics explain "formality," where formality is recast as the firm's decision to participate in societal institutions. The results suggest that differences in unobservable factors, such as entrepreneurial ability, contribute largely to differences in growth rates, survival chances, and societal participation. After controlling for such unobserved heterogeneity, we find that the probability of participation increases with firm size but not with years in business. Changes in participation status are sensitive to the initial size and growth trajectory of the firm.

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  • Jackle, Annette E & Li, Carmen A, 2006. "Firm Dynamics and Institutional Participation: A Case Study on Informality of Micro Enterprises in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 54(3), pages 557-578, April.
    • Handle: RePEc:ucp:ecdecc:y:2006:v:54:i:3:p:557-78
    DOI: 10.1086/500027
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    Cited by:

    1. Cristian MARINESCU & Ileana VALIMĂREANU (MIRCIOI), 2020. "Policies on the Informal Labor Market Regarding Protection of Workers and Entrepreneurs," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 21(4), pages 530-540, October.
    2. Azunre, Gideon Abagna & Amponsah, Owusu & Takyi, Stephen Appiah & Mensah, Henry & Braimah, Imoro, 2022. "Urban informalities in sub-Saharan Africa (SSA): A solution for or barrier against sustainable city development," World Development, Elsevier, vol. 152(C).
    3. Gökçer Özgür & Ceyhun Elgin & Adem Y. Elveren, 2021. "Is informality a barrier to sustainable development?," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 45-65, January.
    4. Kappel, Robert & Ishengoma, Esther K., 2006. "Economic Growth and Poverty: Does Formalisation of Informal Enterprises Matter?," MPRA Paper 1456, University Library of Munich, Germany.
    5. Lars Ivar Oppedal Berge & Armando José Garcia Pires, 2020. "Gender, formality, and entrepreneurial success," Small Business Economics, Springer, vol. 55(4), pages 881-900, December.
    6. Nguyen Thi Thu Phuong & Paulette Castel, 2009. "Voluntary Pension System," World Bank Publications - Reports 28101, The World Bank Group.
    7. Phuong, Nguyen Thi Thu & Castel, Paulette, 2009. "Voluntary pension system challenge of expanding coverage," Social Protection Discussion Papers and Notes 64277, The World Bank.
    8. Natividad, Gabriel, 2019. "Base tributaria y discontinuidades geopolíticas [Tax base and geopolitical discontinuities]," MPRA Paper 113169, University Library of Munich, Germany.

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