IDEAS home Printed from https://ideas.repec.org/a/taf/rsocec/v80y2022i3p387-421.html
   My bibliography  Save this article

Endogenous peer effects and level of informality: some evidence from micro and small firms in Cameroon

Author

Listed:
  • Ariel Herbert Fambeu
  • Georges Dieudonné Mbondo

Abstract

Standard economic theory assumes that individuals’ preferences are independent of their social environment. However, this basic assumption seems partly unrealistic because individual utility can be affected by a variety of social interactions. This paper assesses the role of peer effects on the informality of Micro and Small firms. We use the instrumental variable approach with fixed effects on survey data in the informal sector in Cameroon. Our results show a positive impact of informal behavior of peers of the firm on its level of informality. Thus, we find a social multiplier of 9.43 and 4.65 according to the nature of the reference group. These results show that, in reality, a policy leading one firm to formalize will lead at least nine (or four depending on the reference group) others to do so due to peer effects.

Suggested Citation

  • Ariel Herbert Fambeu & Georges Dieudonné Mbondo, 2022. "Endogenous peer effects and level of informality: some evidence from micro and small firms in Cameroon," Review of Social Economy, Taylor & Francis Journals, vol. 80(3), pages 387-421, July.
    • Handle: RePEc:taf:rsocec:v:80:y:2022:i:3:p:387-421
    DOI: 10.1080/00346764.2020.1769166
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00346764.2020.1769166
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00346764.2020.1769166?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiafeng Gu, 2024. "Peer influence, market power, and enterprises' green innovation: Evidence from Chinese listed firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 108-121, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rsocec:v:80:y:2022:i:3:p:387-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RRSE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.