Journal articles published externally
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These are journal articles by World Bank authors published externally.
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Publication Does Formality Improve Micro-firm Performance? Evidence from the Brazilian SIMPLES Program(2011) Fajnzylber, Pablo; Maloney, William F.; Montes-Rojas, Gabriel V.This paper exploits an extensive Brazilian micro-enterprise survey and the 1996 introduction of a business tax reduction and simplification scheme (SIMPLES) to examine three questions. First, do high tax rates and complex tax regulations really constitute a barrier to the formalization of micro-firms? Second, does formalization improve firm performance measured along several dimensions, including revenues, employment and capital stock? Third, what are the channels through which this occurs? We find that SIMPLES led to a significant increase in formality in several dimensions. Moreover, newly created firms that opt for operating formally show higher levels of revenue and profits, employ more workers and are more capital intensive (only for those firms that have employees). The channel through which this occurs is not access to credit or contracts with larger firms. Rather, it appears that the lower cost of contracting labor leads to adopting production techniques that involve a permanent location and a larger paid labor force.Publication International Economic Activities and Skilled Labour Demand : Evidence from Brazil and China(2009) Fajnzylber, Pablo; Fernandes, Ana M.Using two new firm-level datasets, this article investigates the impact of three international economic activities--the use of imported inputs, exports, and foreign direct investment--on skilled labour demand in Brazil and China. We find that Brazilian firms that engage in these activities exhibit a higher skilled labour demand than firms that do not. In contrast, Chinese firms that engage in these activities have a lower skilled labour demand than firms that do not. Thus, international economic activities act as a channel for skill-biased technology diffusion in Brazil but have an effect of specialization according to comparative advantage in unskilled labour-intensive goods in China.