The Benefits of Formalization: Evidence from Vietnamese Manufacturing SMEs
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The Benefits of Formalization : Evidence from Vietnamese Manufacturing SMEs. / Rand, John; Torm, Nina Elisabeth.
I: World Development, Bind 40, Nr. 5, 05.2012, s. 983–998.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - The Benefits of Formalization
T2 - Evidence from Vietnamese Manufacturing SMEs
AU - Rand, John
AU - Torm, Nina Elisabeth
PY - 2012/5
Y1 - 2012/5
N2 - Based on unique panel data consisting of both formal and informal firms, this paper uses a matched double differenceapproach to examine the relationship between legal status and firm level outcomes in micro, small and medium manufacturing enterprises(SMEs) in Vietnam. Controlling for determining factors and observable time-variant factors that may simultaneously influencethe decision to formalize and subsequent firm performance, we find evidence that becoming officially registered leads to an increasein profits and investments, and a decrease in the use of casual labor (improved contract conditions for workers). Thus, we conclude thatformalizing is beneficial both to firms and the workers in these firms.
AB - Based on unique panel data consisting of both formal and informal firms, this paper uses a matched double differenceapproach to examine the relationship between legal status and firm level outcomes in micro, small and medium manufacturing enterprises(SMEs) in Vietnam. Controlling for determining factors and observable time-variant factors that may simultaneously influencethe decision to formalize and subsequent firm performance, we find evidence that becoming officially registered leads to an increasein profits and investments, and a decrease in the use of casual labor (improved contract conditions for workers). Thus, we conclude thatformalizing is beneficial both to firms and the workers in these firms.
KW - Faculty of Social Sciences
KW - formality
KW - Vietnam
KW - employment
KW - formality
KW - employment
KW - Vietnam
U2 - 10.1016/j.worlddev.2011.09.004
DO - 10.1016/j.worlddev.2011.09.004
M3 - Journal article
VL - 40
SP - 983
EP - 998
JO - World Development
JF - World Development
SN - 1873-5991
IS - 5
ER -
ID: 40368899