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On the Benefits of Formalization: Panel Evidence from Vietnam

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  • Amadou Boly

Abstract

This paper examines the relationship between formalization and firm-level outcomes in Vietnam using a unique panel dataset. Results show that switching firms differ from informal non-switching firms, confirming heterogeneity. We also find that becoming formal leads to increased profits, value added, and revenue. The performance of switching firms is higher than that of informal ones, but remains lower compared to non-switching formal firms. Our results suggest that the benefits of formalization materialize in the short term and persist over time.

Suggested Citation

  • Amadou Boly, 2015. "On the Benefits of Formalization: Panel Evidence from Vietnam," WIDER Working Paper Series wp-2015-038, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2015-038
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    Cited by:

    1. Hanna Berkel & Finn Tarp, 2022. "Informality and Firm Performance in Myanmar," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1363-1382, July.

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