engleski

Evaluating the impacts on firm productivity of informal sector competitors: results of a business survey in South-Eastern Europe

The aim of this paper is to evaluate whether informal sector competitors have a negative impact on the productivity of formal businesses. To analyse the relationship between the productivity of businesses and their perception of the prevalence of informal sector competitors, data is reported from a representative sample of 1, 430 businesses in Bulgaria, Croatia and FYR Macedonia. This reveals that businesses who assert that their competitors always or in most cases participate in the informal economy have significantly lower productivity growth rates compared with those who assert that their competitors do not participate in the informal economy. The implications for theory and policy are then discussed.

entrepreneurship ; informal sector ; productivity ; firm performance ; South-East Europe

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