What causes firms to hide output?
Subtitle: the determinants of informality
By: prepared by Era Dabla-Norris, Mark Gradstein, and Gabriela Inchauste.
Contributors: Gradstein, Mark.; Inchauste, Gabriela.; IMF Institute.; International Monetary Fund.
Series: IMF working paper -- WP/05/160
Publisher: International Monetary Fund, IMF Institute
Published: 2005
Place of publication: Washington, D.C
Language: eng
Number of pages: 32
Subjects: Informal sector (Economics) -- Developing countries -- Econometric models.; Law -- Economic aspects -- Developing countries.
Description: 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.
Notes: "August 2005."

Includes bibliographical references (p. 30-32).

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