Business Formalization in Vietnam

Brian McCaig

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: We estimate the impact of business formalisation using nationally representative panel data on businesses in Vietnam. Our data allows us to observe businesses for two surveys prior to obtaining a license and hence to control for differential trends before formalisation. We find that obtaining a license is not associated with an increase in profits or other business outcomes such as revenue, expenses, and employment once we control for differential trends. Controlling for trends is crucial, as estimates that ignore trends consistently find a larger positive association between becoming licensed and business performance. Our results suggest that inducing more businesses to register is unlikely to bring about large-scale changes for these businesses.

Keywords: Informal; Formalization; Asia; Vietnam; Household business (search for similar items in EconPapers)
Date: 2018-02-01, Revised 2018-02-01
New Economics Papers: this item is included in nep-bec, nep-iue and nep-sea
Note: LCERPA Working Paper No. 2018-7, February 2018.
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http://www.lcerpa.org/public/papers/LCERPA_2018_7.pdf

Related works:
Journal Article: Business Formalisation in Vietnam (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wlu:lcerpa:0113

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