The Benefits of Formalization: Evidence from Vietnamese Manufacturing SMEs

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Informal Entrepreneurship in Developing Economies: The Impacts of Starting up Unregistered on firm Performance (2017, background): “…counterparts (Fajnzylber, Maloney, & Montes-Rojas, 2011; McKenzie & Sakho, 2010) but there is also evidence that registration by informal firms leads to higher firm performance than if they remained unregistered (Demenet, Razafindrakoto, & Roubaud, 2015; Fajnzylber et al.; Rand & Torm, 2012).”
Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research (2014, background): “Rand and Torm (2012) explore the impact of formalisation on small and medium enterprises (SMEs) in Vietnam by employing a matched double difference approach and find a positive impact on profits, investments, and the formality of labour contracts.”
Can Informal Firms Hurt Registered SMEs’ Access to Credit? (2016, unknown): “Because registration and compliance with product regulations account for a significant proportion of their initial investments (Rand and Torm, 2012), owners may decide to stay under government radar and thus limit their risk taking especially if future conditions in the industry are hard to predict…”