Formalization and productivity: Firm-level evidence from Viet Nam

Jann Lay and Tevin Tafese

No wp-2020-164, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Using a firm-level panel dataset on private small- and medium-sized enterprises (SMEs) in Viet Nam's manufacturing sector, this paper examines productivity dynamics of formal and informal firms. We decompose productivity changes into changes within and between formal and informal firms. We assess the contributions of firm entry and exit as well as informal-formal transitions. Our results show that productivity is considerably lower and misallocation more prevalent in the informal than in the formal sector.

Keywords: Formalization; Productivity; Firm productivity; Viet Nam; Misallocation (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-bec, nep-cse, nep-dev, nep-eff, nep-ent, nep-iue and nep-sbm
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Citations: View citations in EconPapers (1)

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