Challenges to formality from formal firms behaving informally: evidence from Central America

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Abstract

ABSTRACT<br>This research explores the competitive environment for urban formal sector firms competing against peerformal sector firms behaving informally in Central America. Explored is the upper bound of the formalinformalcontinuum in a regional economic environment of persistent and widespread economic informalitywhere formal firms may employ informal tactics to gain competitive advantage versus their formal competitors.The 2010 World Bank Enterprise Surveys form the basis for empirical analyses. The results suggest formalfirms utilizing informal practices is widespread and is influenced by firm maturity, firm location, industrysector, firm legal status, firm organization, ownership composition, regulatory environment, internationalquality certification, web presence, entry into global markets, and firm size.<br><br>KEYWORDS: Competition, Formal Sector, Informal Tactics, Central America<br><br>JEL: L10, 017, 054
Original languageEnglish
Pages (from-to)91-114
JournalRevista Economía y Administración
Volume12
Issue number2
StatePublished - Dec 2021

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