What is it about?

It is widely assumed that informal sector enterprises have a harmful impact on the performance of formal enterprises. This paper aims to provide an evidence-based evaluation of whether this is the case. To do so, it reports World Bank Enterprise Survey (WBES) data collected from 360 formal enterprises in Bosnia and Herzegovina in 2019.

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Why is it important?

The finding is that formal enterprises viewing informal competition as a severe obstacle do not witness significantly lower sales growth, employment growth or productivity growth. Indeed, such enterprises witness significantly higher sales growth than those who do not view informal sector competitors as a severe obstacle. The theoretical and policy implications are discussed.

Perspectives

Displays the impact of informal competitors on firm performance.

Professor Colin C Williams
University of Sheffield

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This page is a summary of: EVALUATING THE IMPACT OF INFORMAL SECTOR COMPETITORS ON THE PERFORMANCE OF FORMAL ENTERPRISES: EVIDENCE FROM BOSNIA AND HERZEGOVINA, Journal of Developmental Entrepreneurship, June 2020, World Scientific Pub Co Pte Lt, DOI: 10.1142/s1084946720500144.
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