What Causes Firms to Hide Output? the Determinants of Informality

WPIEA2005160 Image
Price:  $15.00

Author/Editor: Gabriela Inchauste, Mark Gradstein, Era Dabla-Norris
Release Date: © August, 2005
ISBN : 978-1-45186-179-2
Stock #: WPIEA2005160
Stock Status: On back-order

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In many developing countries, a significant part of economic activity takes place in the informal sector. Earlier work has examined the determinants of the size of the informal sector, focusing separately on factors such as tax and regulation burden, financial market development, and the quality of the legal system. We revisit this issue by using an integrated dataset which contains rich information on all these aspects. Testing the channels affecting the degree of informality, we find evidence that all previously identified factors indeed play a role in driving informality. In particular, and consistent with the suggested theoretical model, we find support for the significance of the quality of the legal system.

More publications in this series: Working Papers

More publications by: Gabriela Inchauste ; Mark Gradstein ; Era Dabla-Norris