1 Department of Economics, Copenhagen Business School2 unknown
We analyze the formality benefits through productivity-enhancing public goods. We document that: benefits from formality matter for firms’ optimal decisions; there is a disconnect between the objectives of maximizing formality versus welfare; this disconnect is mitigated under higher formality benefits.
Economics Letters, 2014, Vol 124, Issue 1, p. 151-156
Firm heterogeneity; Production complementarity; Taxation; Enforcement; Regulation