The Demand for, and Consequences of, Formalization among Informal Firms in Sri Lanka

de Mel, Suresh ; McKenzie, David ; Woodruff, Christopher

American Economic Association

关键词: firm behavior;    firm performance;    entrepreneurship;    industrialization;    manufacturing;   

DOI  :  10.1257/app.5.2.122

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

A field experiment in Sri Lanka provides informal firms incentives to formalize. Information about the registration process and reimbursement of direct costs does not increase registration. Payments equivalent to one-half to one month (alternatively, two months) of the median firm's profits leads to registration of around one-fifth (alternatively, one-half ) of firms. Land ownership issues are the most common reason for not registering. Follow-up surveys 15 to 31 months later show higher mean profits, but largely in a few firms that grew rapidly. We find little evidence for other changes in behavior, but formalized firms express more trust in the state.