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Are Large Informal Firms More Productive than the Small Informal Firms? Evidence from Firm-Level Surveys in Africa

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  • Amin, Mohammad
  • Islam, Asif

Abstract

Using data for over 500 informal or unregistered firms in seven countries in Africa, this study explores how labor productivity varies between small and large informal firms. We find robust evidence that small informal firms have higher labor productivity than large informal firms. Thus, even though poor performance of informal firms is typically attributed to their small size vis-à-vis registered or formal sector firms, incremental increases in the size of informal firms does not necessarily imply a narrowing of the formal–informal firm productivity gap.

Suggested Citation

  • Amin, Mohammad & Islam, Asif, 2015. "Are Large Informal Firms More Productive than the Small Informal Firms? Evidence from Firm-Level Surveys in Africa," World Development, Elsevier, vol. 74(C), pages 374-385.
  • Handle: RePEc:eee:wdevel:v:74:y:2015:i:c:p:374-385
    DOI: 10.1016/j.worlddev.2015.05.008
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2016. "Informal Enterprises in Kenya," World Bank Other Operational Studies 24973, The World Bank.
    2. Aalia Cassim & Kezia Lilenstein & Morné Oosthuizen & Francois Steenkamp, 2016. "Informality and Inclusive Growth in Sub-Saharan Africa," Working Papers 201602, University of Cape Town, Development Policy Research Unit.

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    Keywords

    informal; productivity; employment; Africa; firm-size;

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