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SME’s registration: Evidence from an RCT in Bangladesh

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  • De Giorgi, Giacomo
  • Rahman, Aminur

Abstract

Firms informality is pervasive in Bangladesh. We implemented an information campaign on registration and find that the treatment made firms more aware, but had no impact on registration. Low benefits and high indirect costs appear to be barriers to formality.

Suggested Citation

  • De Giorgi, Giacomo & Rahman, Aminur, 2013. "SME’s registration: Evidence from an RCT in Bangladesh," Economics Letters, Elsevier, vol. 120(3), pages 573-578.
    • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:573-578
    DOI: 10.1016/j.econlet.2013.06.026
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    References listed on IDEAS

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    1. Miriam Bruhn, 2011. "License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 382-386, February.
    2. Suresh de Mel & David McKenzie & Christopher Woodruff, 2013. "The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 122-150, April.
    3. McKenzie, David & Seynabou Sakho, Yaye, 2010. "Does it pay firms to register for taxes? The impact of formality on firm profitability," Journal of Development Economics, Elsevier, vol. 91(1), pages 15-24, January.
    4. Kaplan, David S. & Piedra, Eduardo & Seira, Enrique, 2011. "Entry regulation and business start-ups: Evidence from Mexico," Journal of Public Economics, Elsevier, vol. 95(11), pages 1501-1515.
    5. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2016. "A Helping Hand or the Long Arm of the Law? Experimental Evidence on What Governments Can Do to Formalize Firms," The World Bank Economic Review, World Bank, vol. 30(1), pages 24-54.
    6. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2013. "A Helping Hand or the Long Arm of the Law?," World Bank Publications - Reports 22623, The World Bank Group.
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    Cited by:

    1. David McKenzie & Anna Luisa Paffhausen, 2019. "Small Firm Death in Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 645-657, October.
    2. Miriam Bruhn & David McKenzie, 2014. "Entry Regulation and the Formalization of Microenterprises in Developing Countries," The World Bank Research Observer, World Bank, vol. 29(2), pages 186-201.
    3. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2016. "A Helping Hand or the Long Arm of the Law? Experimental Evidence on What Governments Can Do to Formalize Firms," The World Bank Economic Review, World Bank, vol. 30(1), pages 24-54.
    4. Caio Piza & Tulio Antonio Cravo & Linnet Taylor & Lauro Gonzalez & Isabel Musse & Isabela Furtado & Ana C. Sierra & Samer Abdelnour, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low‐ and Middle‐Income Countries: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 12(1), pages 1-167.
    5. Galiani, Sebastian & Meléndez, Marcela & Ahumada, Camila Navajas, 2017. "On the effect of the costs of operating formally: New experimental evidence," Labour Economics, Elsevier, vol. 45(C), pages 143-157.
    6. Jessen, Jonas & Kluve, Jochen, 2021. "The effectiveness of interventions to reduce informality in low- and middle-income countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138.
    7. Tulio Cravo & Caio Piza, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low -and Middle- Income Countries: A Meta-Analysis," IDB Publications (Working Papers) 94938, Inter-American Development Bank.
    8. Rahman, Aminur, 2014. "Investment climate reforms and job creation in developing countries : what do we know and what should we do ?," Policy Research Working Paper Series 7025, The World Bank.
    9. Rothenberg, Alexander D. & Gaduh, Arya & Burger, Nicholas E. & Chazali, Charina & Tjandraningsih, Indrasari & Radikun, Rini & Sutera, Cole & Weilant, Sarah, 2016. "Rethinking Indonesia’s Informal Sector," World Development, Elsevier, vol. 80(C), pages 96-113.
    10. Kabubo-Mariara, Jane & Machio, Phyllis Mumia & Njoroge, Michael Murigi & Chemengich, Margaret, 2023. "Links between firm registration and performance: Does it pay to register?," World Development, Elsevier, vol. 169(C).
    11. Cabrera, José María & Cid, Alejandro & Bernatzky, Marianne Bernatzky, 2016. "The effect of one-on-one assistance on the compliance with labor regulation. A field experiment in extremely vulnerable settings," MPRA Paper 84639, University Library of Munich, Germany.
    12. Pierre Nguimkeu & Cedric Okou, 2021. "Leveraging digital technologies to boost productivity in the informal sector in Sub‐Saharan Africa," Review of Policy Research, Policy Studies Organization, vol. 38(6), pages 707-731, November.
    13. Max Gallien & Vanessa van den Boogaard, 2023. "Formalization and its Discontents: Conceptual Fallacies and Ways Forward," Development and Change, International Institute of Social Studies, vol. 54(3), pages 490-513, May.
    14. Marjan Petreski & Blagica Petreski, 2022. "Unregistered Micro-Performers of Business Activity: The “Who” and “Why” in North Macedonia," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 24(2), pages 45-77, December.
    15. Katharina Gangl & Erich Kirchler & Christian Lorenz & Benno Torgler, 2015. "Wealthy Tax Non-Filers in a Developing Nation: The Roles of Taxpayer Knowledge, Perceived Corruption and Service Orientation in Pakistan," CREMA Working Paper Series 2015-08, Center for Research in Economics, Management and the Arts (CREMA).
    16. Natalia Salazar Ferro & Carlos Antonio Mesa & Natalia Navarrete, 2017. "La estructura de las tarifas de registro en las Cámaras de Comercio y beneficios de sus servicios : impacto sobre la competitividad y la formalidad empresarial," Informes de Investigación 15726, Fedesarrollo.
    17. Campos,Francisco Moraes Leitao & Goldstein,Markus P. & Mckenzie,David J. & Campos,Francisco Moraes Leitao & Goldstein,Markus P. & Mckenzie,David J., 2015. "Short-term impacts of formalization assistance and a bank information session on business registration and access to finance in Malawi," Policy Research Working Paper Series 7183, The World Bank.
    18. Rocha, Rudi & Ulyssea, Gabriel & Rachter, Laísa, 2018. "Do lower taxes reduce informality? Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 134(C), pages 28-49.
    19. Brian McCaig & Jordan Nanowski, 2019. "Business Formalisation in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 55(5), pages 805-821, May.
    20. Benhassine, Najy & McKenzie, David & Pouliquen, Victor & Santini, Massimiliano, 2018. "Does inducing informal firms to formalize make sense? Experimental evidence from Benin," Journal of Public Economics, Elsevier, vol. 157(C), pages 1-14.
    21. Beegle,Kathleen G. & Benjamin,Nancy Claire & Recanatini,Francesca & Santini,Massimiliano, 2014. "Informal economy and the World Bank," Policy Research Working Paper Series 6888, The World Bank.
    22. Acosta, Matias, 2021. "¿Cómo afecta la formalización del trabajo informal independiente de barrios populares a la pobreza multidimensional urbana?," SocArXiv hfmnb, Center for Open Science.

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    More about this item

    Keywords

    Firms; Informality; Development;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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