Heterogeneous Firms and the Impact of Government Policy on Welfare and Informality

Caterina Mendicino, Mauricio Prado

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

We analyze the formality benefits through productivity-enhancing public goods. We document that: benefits from formality matter for firms’ optimal decisions; there is a disconnect between the objectives of maximizing formality versus welfare; this disconnect is mitigated under higher formality benefits.
Original languageEnglish
JournalEconomics Letters
Volume124
Issue number1
Pages (from-to)151-156
ISSN0165-1765
DOIs
Publication statusPublished - 2014

Cite this

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title = "Heterogeneous Firms and the Impact of Government Policy on Welfare and Informality",
abstract = "We analyze the formality benefits through productivity-enhancing public goods. We document that: benefits from formality matter for firms’ optimal decisions; there is a disconnect between the objectives of maximizing formality versus welfare; this disconnect is mitigated under higher formality benefits.",
keywords = "Firm heterogeneity, Production complementarity, Taxation, Enforcement, Regulation",
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Heterogeneous Firms and the Impact of Government Policy on Welfare and Informality. / Mendicino, Caterina; Prado, Mauricio.

In: Economics Letters, Vol. 124, No. 1, 2014, p. 151-156.

Research output: Contribution to journalJournal articleResearchpeer-review

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AU - Prado, Mauricio

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AB - We analyze the formality benefits through productivity-enhancing public goods. We document that: benefits from formality matter for firms’ optimal decisions; there is a disconnect between the objectives of maximizing formality versus welfare; this disconnect is mitigated under higher formality benefits.

KW - Firm heterogeneity

KW - Production complementarity

KW - Taxation

KW - Enforcement

KW - Regulation

U2 - 10.1016/j.econlet.2014.04.018

DO - 10.1016/j.econlet.2014.04.018

M3 - Journal article

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JF - Economics Letters

SN - 0165-1765

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