What Determines Firms' Decisions to Formalize? Empirical Evidence from Rural Indonesia
AbstractIn this paper we analyze the decision of small and micro firms to formalize, i.e. to obtain business and other licenses in rural Indonesia. We use the rural investment climate survey (RICS) that comprises around 2500 non-farm rural enterprises in six Indonesian districts and analyze in an IV approach the effect of formalization on tax payments, corruption, access to credit and revenue. We take firm heterogeneity into account and show how the effect of formalization depends on firm characteristics such as firm size, education and ethnicity of the owner. We identify firm and owner characteristics that make formalization more likely. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 with number 32.
Date of creation: 2009
Date of revision:
Formalization; rural development; rural investment climate;
Find related papers by JEL classification:
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Bruhn, Miriam, 2013.
"A tale of two species: Revisiting the effect of registration reform on informal business owners in Mexico,"
Journal of Development Economics, Elsevier,
Elsevier, vol. 103(C), pages 275-283.
- Bruhn, Miriam, 2012. "A tale of two species : revisiting the effect of registration reform on informal business owners in Mexico," Policy Research Working Paper Series 5971, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.