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Is informality contagious? An analysis of the effects of social conformism on the formalization of small business

Author

Listed:
  • Georges Dieudonné Mbondo

    (University of Douala)

  • Novice Patrick Bakehe

    (University of Douala)

  • Ariel Herbert Fambeu

    (University of Douala)

Abstract

This study seeks to econometrically estimate the impact of social conformism on the will of managers to register their businesses. The data used is from the Second Employment and Informal Sector Survey (EESI 2) carried out in 2010 on 3560 micro and small Cameroonian businesses. Using an instrumental variable probit model, we find a positive and significant endogenous effect. However, we find that the social pressure which brings businesses to conformism acts only beyond a given threshold.

Suggested Citation

  • Georges Dieudonné Mbondo & Novice Patrick Bakehe & Ariel Herbert Fambeu, 2022. "Is informality contagious? An analysis of the effects of social conformism on the formalization of small business," Economics Bulletin, AccessEcon, vol. 42(2), pages 317-329.
    • Handle: RePEc:ebl:ecbull:eb-21-00206
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P29.pdf
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    More about this item

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics

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