World Bank2013-04-222013-04-222012https://hdl.handle.net/10986/13252Informality hampers economic performance at both macro and micro levels. High degree of informality and low economic growth tend to go hand-in-hand, although evidence shows that the relationship likely comes from common determinants of both. Informality in Ecuador remains high compared to other countries. This study offers a novel look at informality in Ecuador by directly asking firm owners and workers about their views and behavior. The analysis of the causes and costs of informality for firms in Ecuador in this study is based on data from a 2011 enterprise survey commissioned specifically for this study and complemented by focus groups and in-depth interviews. The survey captures the aspects of the regulatory framework which are most problematic for compliance, and the specific reasons for non-compliance. The study focuses on micro and small firms in the urban areas of Ecuador. The sectors of activity, geographic locations, and sizes of firms covered by this study were agreed upon with the Government during the initial consultations on the report. The study finds that many micro and small firms in Ecuador have limited growth potential, due to low entrepreneurial ability and lack of access to and poor quality of credit.La informalidad afecta el desempeño económico tanto a nivel micro como a nivel macro. Este estudio ofrece una mirada nueva sobre la informalidad en el Ecuador, al preguntar directamente a los empresarios y los trabajadores sobre sus opiniones y comportamiento. El análisis de las causas y los costos de la informalidad para las empresas ecuatorianas que realiza este estudio se basa en datos de una encuesta empresarial realizada en 2011 específicamente que además fue complementada con grupos focales y entrevistas en profundidad. La encuesta recoge los aspectos del marco regulatorio cuyo cumplimiento es el más problemático y las razones específicas de la falta de cumplimiento. Asimismo, contiene amplia información para caracterizar a las empresas en cuanto a su acceso a financiamiento, su potencial de crecimiento y sus puntos de vista sobre el contrato social (en particular, la tributación). Los datos cualitativos ofrecen información detallada acerca de la opinión de empresarios y trabajadores sobre lo que significa ser informal y los principales obstáculos que existen para la formalización. El estudio se centra en las micro y pequeñas empresas de las zonas urbanas. Concluye que muchas micro y pequeñas empresas del Ecuador tienen un limitado potencial de crecimiento por la poca capacidad empresarial, el escaso acceso a y las malas condiciones del crédito.en-USCC BY 3.0 IGOACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCINGADVANCED ECONOMIESAGE COMPOSITIONBANK LOANSBANKSBARGAINING POWERBASIC NEEDSBORROWERBORROWINGBRIBESBROKERBUSINESS ENVIRONMENTBUSINESS OPPORTUNITIESBUSINESS OPPORTUNITYBUSINESS OWNERSCASH FLOWCOLLATERALCOMPANYCOMPETITIVE PRESSURECORRUPTIONCREDIT ACCESSCREDIT GUARANTEESCREDIT MARKETSCURRENCYCUSTOMER BASEDEBTDEVELOPMENT BANKDISMISSALDOMESTIC WORKERSDOWNSIZINGDRIVERSEARNINGSECONOMIC ACTIVITYECONOMIC GROWTHEDUCATIONAL ATTAINMENTEMERGING ECONOMIESEMPLOYEEEMPLOYEREMPLOYMENT GENERATIONEMPLOYMENT GROWTHEMPLOYMENT GROWTH RATESEMPLOYMENT OPPORTUNITIESENTREPRENEURENTREPRENEURIAL ABILITYENTREPRENEURSENTREPRENEURSHIPEQUIPMENTEXCLUSIONEXPANSIONEXPANSIONSEXPORTERFAMILIESFAMILY BUSINESSESFAMILY RESPONSIBILITIESFEMALE ENTREPRENEURSFINANCIAL DEPTHFIRING RESTRICTIONSFIRM DYNAMICSFIRM ENTRYFIRM EXITFIRM GROWTHFIRM LEVELFIRM PERFORMANCEFIRM SIZEFIRM SIZESFIRM SURVIVALFIRMSFIRST LOANFORMAL FINANCIAL SECTORFORMAL SECTOR WORKERSFUNDING SOURCEGENDERGROSS DOMESTIC PRODUCTHIGH INTEREST RATESHOUSEHOLDSINFLATIONINFORMAL ECONOMYINFORMAL EMPLOYMENTINFORMAL LENDERINFORMAL LENDERSINFORMAL SECTORINFORMAL WORKERSINFORMATION ASYMMETRIESINFORMATION SHARINGINITIAL LOANSINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL STANDARDSINVENTORYINVESTMENT CLIMATEJOBSLABOR COSTSLABOR FORCELABOR FORCE SURVEYLABOR MARKETLABOR MARKET INDICATORSLABOR MARKET RIGIDITIESLABOR PRODUCTIVITYLABOR REGULATIONLABOR REGULATIONSLABOR RELATIONSLABOURLACK OF ACCESSLACK OF INFORMATIONLEGAL REQUIREMENTLEGAL REQUIREMENTSLIABILITYLIQUIDITYLOANLOAN MATURITYLOAN SIZELONG-TERM INVESTMENTLOW EMPLOYMENTMATURITYMEDIA CAMPAIGNSMEDIUM ENTERPRISEMICRO ENTREPRENEURSMICRO-ENTERPRISEMICRO-ENTERPRISESMICRO-ENTREPRENEURSMICROFINANCEMINIMUM WAGENEW BUSINESSNOTARYOCCUPATIONSPAWNPENSIONSPERSONAL LOANSPRINCIPAL FACTORPRIVATE FIRMSPRODUCING GOODSPRODUCTION UNITSPRODUCTIVITY GROWTHPROFITABILITYPUBLIC BANKPUBLIC POLICYRECEIPTSREFERENDUMREGULATORY FRAMEWORKRETURNRULE OF LAWSAFETY NETSSALARIED EMPLOYMENTSALARIED WORKERSALARIED WORKERSSALARY COSTSSAVINGSSELF-EMPLOYMENTSERVICE SECTORSSEVERANCE PAYMENTSSHADOW ECONOMYSHOPSHOP OWNERSSHOPSSIZE OF FIRMSMALL BUSINESSSMALL BUSINESSESSMALL ENTERPRISESSMALL FIRMSMALL FIRMSSMALL-SCALE ENTREPRENEURSSMESOCIAL SECURITYSOURCE OF INCOMESOURCES OF CREDITSOURCES OF FINANCESTART-UPSTART-UP CAPITALSTART-UPSSTATE SUPPORTSUPPLIERSUPPLIERSSURVIVAL RATESURVIVAL RATESTAXTAX BENEFITSTAX BURDENTAX REGIMETAX RULESTAX SYSTEMTAXATIONTERMS OF LOANSTOTAL EMPLOYMENTTRAINED WORKERSURBAN AREASVENDORVENDORSWAGE EMPLOYMENTWOMEN OWNERSWORKERYOUNG WORKERSWorld Bank10.1596/13252