On the Short- and Medium-Term Effects of Formalisation: Panel Evidence from Vietnam

This paper analyses the consequences of formalisation on the performance of informal firms, using a panel dataset from Vietnam. We find that switching firms (before switching) have higher profit and value added compared to non-switching firms; suggesting heterogeneity. Becoming formal leads to an additional increase in switching firms’ profit and value added. The benefits of formalisation materialise in the short-term (one year) and persist in the longer-term (three or more years). These benefits run through various channels such as better access to powered equipment or higher business association membership; but not better access to credit.     

Is corruption distasteful or just another cost of doing business?

Public Choice - Using data from a lab experiment carried out in Kenya, we show that while “legitimate” costs and costs imposed by corruption both deter investment, the latter is no more...