Impact of sourcing from the informal economy on the export likelihood and performance of emerging economy firms

Octavio Escobar, Olivier Lamotte, Ana Colovic and Pierre-Xavier Meschi
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Ana Colovic: NEOMA - Neoma Business School
Pierre-Xavier Meschi: CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMU IAE - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - AMU - Aix Marseille Université

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Abstract: Building on the institutional economics perspective, we study how local firms in an emerging economy exploit institutional voids by sourcing inputs from industries with a large informal economy. We argue that this allows them to build a cost-related competitive advantage and leverage it both to export and to enhance export performance. The empirical study uses a unique dataset compiled by the Mexican authorities covering manufacturing plants between 2005 and 2012. Our results indicate that firms operating in industries that procure from industries with an extensive informal economy are more likely to export and to have better export performance.

Date: 2021-09-30
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Citations: View citations in EconPapers (1)

Published in Industrial and Corporate Change, 2021, 31 (3), pp.610-627. ⟨10.1093/icc/dtab068⟩

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Journal Article: Impact of sourcing from the informal economy on the export likelihood and performance of emerging economy firms (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03544408

DOI: 10.1093/icc/dtab068

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