Social and Behavioral Sciences Commons^™

Are Large Informal Firms More Productive Than The Small Informal Firms? Evidence From Firm-Level Surveys In Africa, Mohammad Amin, Asif Islam

Mohammad Amin

Using data for over 500 informal or unregistered firms in seven countries in Africa, this study explores how labor productivity varies between small and large informal firms. We find robust evidence that small informal firms have higher labor productivity than large informal firms. Thus, even though poor performance of informal firms is typically attributed to their small size vis-à-vis registered or formal sector firms, incremental increases in the size of informal firms does not necessarily imply a narrowing of the formal-informal firm productivity gap.

The Relevance Of Firm-Size In The Informal Sector: Evidence From Developing Countries, Mohammad Amin

Mohammad Amin

Using newly collected on informal firms in 11 countries in Africa, we explore whether firm-size matters at all for the structure, conduct and performance of the firms. While firm-size is known to be an important attribute of the firms in the formal sector, it is not obvious what the relevance of firm-size is for the informal sector. Informal firms are small, many of them run alone by the owner, and have limited variation in size. Notwithstanding the limited variation in firm-size, our results show that firm-size is highly correlated with a number of firm characteristics such as job growth, labor …

The Relevance Of Firm-Size For The Informal Sector, Mohammad Amin

Mohammad Amin

Using newly collected on informal firms in 11 countries in Africa, we explore whether firm-size matters at all for the structure, conduct and performance of the firms. While firm-size is known to be an important attribute of the firms in the formal sector, it is not obvious what the relevance of firm-size is for the informal sector. Informal firms are small, many of them run alone by the owner, and have limited variation in size. Notwithstanding the limited variation in firm-size, our results show that firm-size is highly correlated with a number of firm characteristics such as job growth, labor …

Crime Against Informal Businesses In Africa: Natives Vs. Immigrants, Mohammad Amin

Mohammad Amin

The literature on crime seeks to identify groups of agents based on their socio-economic-demographic characteristics that are more likely to be victims of crime than others. The present paper contributes to this literature by focusing on crime against informal businesses in Africa and highlighting how victimization rates vary between businesses owned by natives and immigrants. We find that immigrant-owned businesses are significantly more likely to be targeted by criminals than native-owned businesses. However, much of this difference is due to higher victimization rates for businesses owned by recent immigrants to the city. Businesses owned by immigrants that have spent about …

Gender And Informality (A Short Note), Mohammad Amin

Mohammad Amin

For a sample of informal firms in Burkina Faso, Cameroons, Cape Verde, Cote d’Ivoire, Madagascar and Mauritius, this note compares male and female owned businesses. The results provide mixed evidence on a number of hypotheses discussed in the literature for firms in the formal sector. First, the female under-performance hypothesis is confirmed, but only for firm-size. For firm-efficiency measured by the average productivity of labor, we find little difference across male and female owned businesses. Second, consistent with the view that women may face glass-ceiling in getting managerial positions, we find that women managers in our sample have less experience …

Gender And Firm-Size: Evidence From Africa, Mohammad Amin

Mohammad Amin

A number of studies show that relative to male owned businesses, female owned businesses are smaller in size. However, these studies are restricted to the formal or the organized sector. Also, with some exceptions, they focus on the developed countries. This paper explores the gender and firm-size relationship for a sample of informal or unregistered firms in six developing countries in Africa including Burkina Faso, Cameroons, Cape Verde, Cote d’Ivoire, Madagascar and Mauritius. We find strong evidence that female owned businesses are smaller than male owned businesses.

[Data and Stata do files included]

Home-Based Informal Businesses And The Gender Dimension, Mohammad Amin

Mohammad Amin

Anecdotal evidence suggests that working from home makes it easier to balance work and family life. This is particularly attractive to women, who are viewed as primary caregivers in the family in most developing countries. However, there is some concern in the literature that family responsibility may detract from doing business, leading to fewer hours of operation and lower efficiency for home-based businesses run by women. The present paper tests these hypotheses using data on informal or unregistered firms in five African countries. We find strong evidence that female entrepreneurs have a greater proclivity compared with male entrepreneurs to work …

Immigrants In The Informal Sector: Evidence From Africa (Short Note), Mohammad Amin

Mohammad Amin

A survey of informal businesses in Burkina Faso, Cameroons and Cape Verde shows that roughly half of the businesses are owned by immigrants. Systematic differences between immigrant-owned and native-owned businesses might be expected given that immigrants are usually a vulnerable group and take time to assimilate with the native community. While the survey shows some important differences between native and immigrant owners of businesses, there is no clear evidence that relative to natives, immigrants are either discriminated against, are less efficient or come from a relatively less privileged background. However, immigrants are more likely to be males, unmarried and migrate …

How Different Are Service And Manufacturing Firms In The Informal Sector? (Short Note), Mohammad Amin

Mohammad Amin

A comparison of service and manufacturing firms in the informal sector shows that service firms are larger in terms of total sales and also generate more output per worker. They rely less on physical infrastructure and machines but more on human capital. Service firms also appear to be better integrated with the financial system with access to finance being less of an obstacle to their business. Some of the commonly held reasons for not registering such as taxes that registered businesses have to pay and benefits from registering such as better access to government programs appear to be less important …