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Informality and profitability : evidence from a new firm survey in Ecuador (الإنجليزية)

This paper estimates the impact of informality on profits using a new survey administered to 1,200 firms with less than 50 employees in four cities in Ecuador. The paper presents a novel definition of informality which explicitly recognizes that most firms comply with some regulations but not others. Accounting for firm selection and controlling for a large set of firm, owner, and location characteristics, the paper finds that more formal firms tend...
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