On the effect of the costs of operating formally : new experimental evidence

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dc.contributor.MentorGaliani, Sebastián
dc.creator.AutorNavajas Ahumada, Camila Eugenia
dc.creator.AutorGaliani, Sebastián
dc.creator.AutorMeléndez, Marcela
dc.date.accessioned11/9/2016 14:42Z
dc.date.available11/9/2016 14:42Z
dc.date.issued2015-05-26
dc.descriptionFil: Navajas Ahumada, Camila Eugenia
dc.descriptionGaliani, Sebastián
dc.descriptionMeléndez, Marcela. Universidad de San Andrés. Departamento de Economía; Argentina.
dc.description.abstractThis paper analyzes the impact of the elimination of the initial fixed costs of registration on the decision of informal firms to operate formally in Bogotá, Colombia. The Chamber of Commerce of Bogotá (CCB) conducts workshops for prospective formal-sector entrants and arranges personalized meetings for them with CCB agents. The CCB’s decision to significantly reduce the transaction costs of registration and the entry into force of Act No. 1429 of 2010, which eliminated the costs of the initial procedure for registering as a formal enterprise and provided exemptions from relevant taxes during the first years after formalization, provided us with an ideal experiment for studying how the elimination of the initial fixed costs of formalization would influence firms’ decision to operate formally or not. We obtained two important results. First, while a workshop treatment had no effect on firms’ formalization decisions, meetings at the firm with CCB agents raised the likelihood that a business would begin to operate formally by 5.5 percentage points for all the firms that were invited, at random, to participate in this arm of the intervention and by 32 percentage points for the firms that accepted the invitation. Second, the effect on the treatment firms did not persist over time. After a year of formal operation, it disappeared. These results indicate that substantial reductions in the fixed costs of operating formally are not effective in formalization choices, since such reductions had no lasting effect on formalization decisions.
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dc.identifier.citationNavajas Ahumada, C. E., Galiani, S. y Meléndez, M. (2015). On the effect of the costs of operating formally : new experimental evidence. [Tesis de maestría, Universidad de San Andrés. Departamento de Economía]. Repositorio Digital San Andrés. http://hdl.handle.net/10908/11904
dc.identifier.otherTesis M. Eco. 90
dc.identifier.urihttp://hdl.handle.net/10908/11904
dc.languageeng
dc.publisherUniversidad de San Andrés. Departamento de Economía
dc.rightsinfo:eu-repo/semantics/openAccess
dc.rightshttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectInformal sector (Economics) -- Colombia -- Bogotá -- Econometric models.
dc.subjectBusiness enterprises -- Colombia -- Bogotá -- Econometric models.
dc.subjectSector informal (Economía) -- Colombia -- Bogotá -- Modelos econométricos.
dc.subjectEmpresas comerciales -- Colombia -- Bogotá -- Modelos econométricos.
dc.titleOn the effect of the costs of operating formally : new experimental evidence
dc.typeTesis
dc.typeinfo:eu-repo/semantics/masterThesis
dc.typeinfo:ar-repo/semantics/tesis de maestría
dc.typeinfo:eu-repo/semantics/updatedVersion
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