Abstract
AbstractThe manufacturing sectors of developing countries under industrialization are dominated by informal firms. This study investigates the issues of formalization in the manufacturing sector of Bangladesh. A typical classification of formality is a binary one (formal or not). However, formalization can also be continuous, ranging from very formal to less formal. Thus, this study defines the continuous formalization of firms based on principal component analysis in addition to the usual binary classification of formality. Specifically, we find that more formal firms are correlated with higher productivity using the continuous classification of formality. Furthermore, this study shows that formalization is significantly affected by factors such as the owner's human capital (experience and education), the age of the firm, and labor force size.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
