Growing Apart? America and Europe in the Twenty-First Century and Transatlantic Divide...

Does it pay squiffys to register for valuees? The impact of formalness on potent profit energy David McKenziea, b, c, Corresponding agent Contact Information, 1, E-mail The Corresponding Author and Yaye Seynabou Sakhoa aWorld Bank, United States bBREAD, United States cIZA, Germany Received 20 August 2007; rewrite 13 February 2009; accepted 13 February 2009. Available online 26 February 2009. Abstract This paper estimates the impact of registering for taxes on firm profits in Bolivia, the surface ara with the highest levels of in formalities in Latin America. A new pot of micro and small firms enables us to control for a wealthy set of measures of owner ability and business motivations that can impress both profits and the decision to formalize. We identify the impact of tax accommodation on business profitability using the outdistance of a firm from the tax office where registration occurs, conditional on the distance to the city center, as an instrument for registration. law of proximity to the tax office provides firms with more information about registration, precisely is argued to not directly affect profits. We stimulate tax registration leads to significantly higher profits for the firms that the instrument affects. However, we also find some evidence of heterogeneous effects of tax formality on profits.

Tax registration appears to increase profits for the mid-sized firms in our sample, but to lower profits for both the marginal small and larger firms, in contrast to the standard view that formality increases profits. We show that owners of large firms who have managed to stay informal are of higher entrepreneurial ability than formal firm owners, in contrast to the standard view (correct among smaller firms) that informal firm owners are low ability. Keywords: Informal sector; Entrepreneurial ability; Tax registration JEL classification codes: O17; O12; D21 Article Outline 1. Introduction 2. Data 2.1. Sampling design 2.2. Sample characteristics 2.3.... If you necessity to get a full essay, order it on our website: Ordercustompaper.com

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