Informality among multi-product firms
| dc.contributor.author | Becker, Dennis | |
| dc.date.accessioned | 2018-08-21T17:10:39Z | |
| dc.date.available | 2018-08-21T17:10:39Z | |
| dc.date.issued | 2014-11-01 | |
| dc.description | WP 2014-21 November 2014 | |
| dc.description | JEL Classification Codes: L2; L5; O17 | |
| dc.description.abstract | This paper introduces product-level regulation as a new driver of informality and diversification in a model of heterogeneous multi-product firms and endogenous product choice. Firms face regulations at both the firm- and product-level and may comply with or evade either regulation. The model suggests that firm-level regulation directly causes informality by deterring firm registration. However, the product-level regulation has two effects: it directly drives product informality as evasion of product regulation leading to informality within the formal sector and indirectly deters firms from registering. Further, I demonstrate that the Gini coefficient and Herfindahl index can be implemented in multi-product firm models as revenue-based measures of product diversification. Contrary to the prediction of the commonly used product scope, the revenue-based measures indicate informal firms to be more diversified than formal firms. | |
| dc.identifier.uri | https://hdl.handle.net/1813/58002 | |
| dc.language.iso | en_US | |
| dc.publisher | Charles H. Dyson School of Applied Economics and Management, Cornell University | |
| dc.subject | heterogeneous firms | |
| dc.subject | informality | |
| dc.subject | regulations | |
| dc.subject | diversification | |
| dc.title | Informality among multi-product firms | |
| dc.type | article | |
| dcterms.license | http://hdl.handle.net/1813/57595 |
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