We provide evidence on whether informal competition has a negative bearing on firm productivity in the formal sector. To do this we employ the World Bank’s Enterprise Survey (WBES) with detailed information for more than sixty thousand manufacturing and services formal firms from over 127 countries. We find a negative association between these two variables, which is further supported when using instrumental variables.
Nota bibliográficaFunding Information:
I am very thankful for detailed comments, suggestions, and support from Alberto Chong at Georgia State University. Mariano Montoya provided excellent research assistance. The standard disclaimer applies.
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- developing countries