Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit
The authors use firm-level, cross-county data from Investment Climate surveys in 49 developing countries to investigate an important channel through which informality can affect productivity: access to credit and external finance. Informality is me...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/01/8935642/informality-among-formal-firms-firm-level-cross-country-evidence-tax-compliance-access-credit http://hdl.handle.net/10986/6444 |
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okr-10986-64442021-04-23T14:02:30Z Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit Gatti, Roberta Honorati, Maddalena ABSENCE OF CORRUPTION ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FINANCING ACCESS TO FORMAL CREDIT ACCOUNTING ASSET VALUE BALANCE SHEETS BANK COMPETITION BANK FINANCING BANK POLICY BANKS BIASES BOOK VALUE BRIBE BRIBES BUSINESS ASSOCIATIONS CALCULATION CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLEGE EDUCATION CORPORATE TAX RATE CORRUPTION CREDIT % NEEDS CREDIT ACCESS CREDIT AVAILABILITY CREDIT BUREAU CREDIT CARDS CREDIT COEFFICIENTS CREDIT CONSTRAINTS CREDIT INFORMATION CREDIT LINE CREDIT MARKET CREDIT REGISTRY CREDIT WORTHINESS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES EARNINGS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMERGING ECONOMIES EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EXCLUSION EXPORTER EXTERNAL FINANCE EXTERNAL FINANCING EXTRA CASH FAMILY LOANS FINANCIAL CORPORATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCING NEEDS FINANCING OBSTACLES FIRM PERFORMANCE FIRM SALES FIXED ASSETS FOREIGN BANK FOREIGN BANKS FOREIGN OWNERSHIP GOVERNMENT REVENUES INCOME INFORMAL CREDIT INFORMAL ECONOMY INFORMAL FINANCE INFORMAL WORKERS INSTITUTIONAL DEVELOPMENT INSTRUMENT INTERNATIONAL BANK INVESTMENT CLIMATE LABOR FORCE LABOR MARKET LARGE ENTERPRISES LARGE FIRMS LEGAL RIGHTS LIMITED ACCESS LINE OF CREDIT LOAN LOAN SIZES LOCAL BANK LOCAL BANKS LOW INCOME MACROECONOMICS MARKET DEVELOPMENT MARKET SEGMENTATION MEDIUM ENTERPRISES MICRO BUSINESS MIDDLE EAST MONEY LENDERS NET PROFITS NORTH AFRICA OBSTACLES TO FINANCE OVERDRAFT OVERDRAFT FACILITY OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY PRODUCTIVITY PROPERTY RIGHTS PUBLIC CREDIT PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY RETURN SALES SALES GROWTH SECONDARY EDUCATION SECONDARY SCHOOL SELF-EMPLOYMENT SHADOW ECONOMIES SHADOW ECONOMY SHARE OF PROFITS SHAREHOLDER SMALL BUSINESS SMALLER FIRMS SOCIAL SECURITIES SOCIAL SECURITY SOCIAL SECURITY CONTRIBUTIONS SOURCE OF INFORMATION START-UP SUB-SAHARAN AFRICA TAX TAX ADMINISTRATION TAX BURDEN TAX CODES TAX COMPLIANCE TAX RATE TAX RATES TAXATION TRADE CREDIT TRADE FINANCING TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TURNOVER VALUE OF ASSETS WORK FORCE WORKING CAPITAL The authors use firm-level, cross-county data from Investment Climate surveys in 49 developing countries to investigate an important channel through which informality can affect productivity: access to credit and external finance. Informality is measured as self-reported lack of tax compliance in a sample of registered firms that also answered questions on a large set of other characteristics. The authors find that more tax compliance is significantly associated with more access to credit both in OLS and in country fixed effects estimates. In particular, the link between credit and formality is stronger in high-formality countries. This suggests that firms' balance sheets are relatively more informative for financial institutions in environments where signal extraction is a less noisy process. The authors' results are robust to the inclusion of a wide array of correlates and to two-stage estimation. 2012-05-25T18:18:43Z 2012-05-25T18:18:43Z 2008-01-01 http://documents.worldbank.org/curated/en/2008/01/8935642/informality-among-formal-firms-firm-level-cross-country-evidence-tax-compliance-access-credit http://hdl.handle.net/10986/6444 English Policy Research Working Paper; No. 4476 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSENCE OF CORRUPTION ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FINANCING ACCESS TO FORMAL CREDIT ACCOUNTING ASSET VALUE BALANCE SHEETS BANK COMPETITION BANK FINANCING BANK POLICY BANKS BIASES BOOK VALUE BRIBE BRIBES BUSINESS ASSOCIATIONS CALCULATION CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLEGE EDUCATION CORPORATE TAX RATE CORRUPTION CREDIT % NEEDS CREDIT ACCESS CREDIT AVAILABILITY CREDIT BUREAU CREDIT CARDS CREDIT COEFFICIENTS CREDIT CONSTRAINTS CREDIT INFORMATION CREDIT LINE CREDIT MARKET CREDIT REGISTRY CREDIT WORTHINESS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES EARNINGS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMERGING ECONOMIES EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EXCLUSION EXPORTER EXTERNAL FINANCE EXTERNAL FINANCING EXTRA CASH FAMILY LOANS FINANCIAL CORPORATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCING NEEDS FINANCING OBSTACLES FIRM PERFORMANCE FIRM SALES FIXED ASSETS FOREIGN BANK FOREIGN BANKS FOREIGN OWNERSHIP GOVERNMENT REVENUES INCOME INFORMAL CREDIT INFORMAL ECONOMY INFORMAL FINANCE INFORMAL WORKERS INSTITUTIONAL DEVELOPMENT INSTRUMENT INTERNATIONAL BANK INVESTMENT CLIMATE LABOR FORCE LABOR MARKET LARGE ENTERPRISES LARGE FIRMS LEGAL RIGHTS LIMITED ACCESS LINE OF CREDIT LOAN LOAN SIZES LOCAL BANK LOCAL BANKS LOW INCOME MACROECONOMICS MARKET DEVELOPMENT MARKET SEGMENTATION MEDIUM ENTERPRISES MICRO BUSINESS MIDDLE EAST MONEY LENDERS NET PROFITS NORTH AFRICA OBSTACLES TO FINANCE OVERDRAFT OVERDRAFT FACILITY OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY PRODUCTIVITY PROPERTY RIGHTS PUBLIC CREDIT PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY RETURN SALES SALES GROWTH SECONDARY EDUCATION SECONDARY SCHOOL SELF-EMPLOYMENT SHADOW ECONOMIES SHADOW ECONOMY SHARE OF PROFITS SHAREHOLDER SMALL BUSINESS SMALLER FIRMS SOCIAL SECURITIES SOCIAL SECURITY SOCIAL SECURITY CONTRIBUTIONS SOURCE OF INFORMATION START-UP SUB-SAHARAN AFRICA TAX TAX ADMINISTRATION TAX BURDEN TAX CODES TAX COMPLIANCE TAX RATE TAX RATES TAXATION TRADE CREDIT TRADE FINANCING TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TURNOVER VALUE OF ASSETS WORK FORCE WORKING CAPITAL |
| spellingShingle |
ABSENCE OF CORRUPTION ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCESS TO FINANCE ACCESS TO FINANCING ACCESS TO FORMAL CREDIT ACCOUNTING ASSET VALUE BALANCE SHEETS BANK COMPETITION BANK FINANCING BANK POLICY BANKS BIASES BOOK VALUE BRIBE BRIBES BUSINESS ASSOCIATIONS CALCULATION CAPITAL MARKETS CASH FLOW CHECKS CLAIM COLLATERAL COLLEGE EDUCATION CORPORATE TAX RATE CORRUPTION CREDIT % NEEDS CREDIT ACCESS CREDIT AVAILABILITY CREDIT BUREAU CREDIT CARDS CREDIT COEFFICIENTS CREDIT CONSTRAINTS CREDIT INFORMATION CREDIT LINE CREDIT MARKET CREDIT REGISTRY CREDIT WORTHINESS DEMAND FOR CREDIT DEPENDENT DEPOSIT DEPOSIT MONEY BANKS DEVELOPING COUNTRIES EARNINGS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMERGING ECONOMIES EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EXCLUSION EXPORTER EXTERNAL FINANCE EXTERNAL FINANCING EXTRA CASH FAMILY LOANS FINANCIAL CORPORATION FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCING NEEDS FINANCING OBSTACLES FIRM PERFORMANCE FIRM SALES FIXED ASSETS FOREIGN BANK FOREIGN BANKS FOREIGN OWNERSHIP GOVERNMENT REVENUES INCOME INFORMAL CREDIT INFORMAL ECONOMY INFORMAL FINANCE INFORMAL WORKERS INSTITUTIONAL DEVELOPMENT INSTRUMENT INTERNATIONAL BANK INVESTMENT CLIMATE LABOR FORCE LABOR MARKET LARGE ENTERPRISES LARGE FIRMS LEGAL RIGHTS LIMITED ACCESS LINE OF CREDIT LOAN LOAN SIZES LOCAL BANK LOCAL BANKS LOW INCOME MACROECONOMICS MARKET DEVELOPMENT MARKET SEGMENTATION MEDIUM ENTERPRISES MICRO BUSINESS MIDDLE EAST MONEY LENDERS NET PROFITS NORTH AFRICA OBSTACLES TO FINANCE OVERDRAFT OVERDRAFT FACILITY OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE CREDIT PRIVATE CREDIT BUREAU PROBABILITY PRODUCTIVITY PROPERTY RIGHTS PUBLIC CREDIT PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY RETURN SALES SALES GROWTH SECONDARY EDUCATION SECONDARY SCHOOL SELF-EMPLOYMENT SHADOW ECONOMIES SHADOW ECONOMY SHARE OF PROFITS SHAREHOLDER SMALL BUSINESS SMALLER FIRMS SOCIAL SECURITIES SOCIAL SECURITY SOCIAL SECURITY CONTRIBUTIONS SOURCE OF INFORMATION START-UP SUB-SAHARAN AFRICA TAX TAX ADMINISTRATION TAX BURDEN TAX CODES TAX COMPLIANCE TAX RATE TAX RATES TAXATION TRADE CREDIT TRADE FINANCING TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TURNOVER VALUE OF ASSETS WORK FORCE WORKING CAPITAL Gatti, Roberta Honorati, Maddalena Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| relation |
Policy Research Working Paper; No. 4476 |
| description |
The authors use firm-level, cross-county
data from Investment Climate surveys in 49 developing
countries to investigate an important channel through which
informality can affect productivity: access to credit and
external finance. Informality is measured as self-reported
lack of tax compliance in a sample of registered firms that
also answered questions on a large set of other
characteristics. The authors find that more tax compliance
is significantly associated with more access to credit both
in OLS and in country fixed effects estimates. In
particular, the link between credit and formality is
stronger in high-formality countries. This suggests that
firms' balance sheets are relatively more informative
for financial institutions in environments where signal
extraction is a less noisy process. The authors'
results are robust to the inclusion of a wide array of
correlates and to two-stage estimation. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Gatti, Roberta Honorati, Maddalena |
| author_facet |
Gatti, Roberta Honorati, Maddalena |
| author_sort |
Gatti, Roberta |
| title |
Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| title_short |
Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| title_full |
Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| title_fullStr |
Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| title_full_unstemmed |
Informality among Formal Firms : Firm-level, Cross-country Evidence on tax Compliance and Access to Credit |
| title_sort |
informality among formal firms : firm-level, cross-country evidence on tax compliance and access to credit |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/01/8935642/informality-among-formal-firms-firm-level-cross-country-evidence-tax-compliance-access-credit http://hdl.handle.net/10986/6444 |
| _version_ |
1764400130901934080 |