Publication: Gender, Entry Regulations, and Small Firm Informality : What Do the Micro Data Tell Us?
Date
2009-09
ISSN
Published
2009-09
Author(s)
Abstract
Informality is pervasive in many
developing countries, where the majority of businesses do
not register. One view, linked strongly with Hernando de
Soto and the International Finance Corporations (IFC's)
doing business project, is that the informal sector consists
of potential entrepreneurs who remain small as the
administrative and financial costs of becoming formal
prevent firms from formalizing, but that formalization is
needed to obtain access to finance, and have the incentive
to grow without fear of government inspectors. Moreover, it
is often argued further that the burden of regulation is
even larger for female business owners, because they have
less time and money to overcome expensive and time-consuming
barriers to registration. As a result, doing business 2008
claims that the benefits of business regulation reform are
especially high for women, and shows that across countries
there is a positive association between the percentage of
entrepreneurs who are women and the ease of doing business.
This note largely focuses on the implications for micro and
very small enterprises in urban areas, which comprise most
businesses in developing countries. Almost all rural firms
are informal.
Citation
“McKenzie, David. 2009. Gender, Entry Regulations, and Small Firm Informality : What Do the Micro Data Tell Us?. PREM Notes; No. 142. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/fcc8f5f2-e6fb-5f9f-914a-3108024ae907 License: CC BY 3.0 IGO.”