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A logit analysis of norm compliance by micro-enterprises in Chile

Author

Listed:
  • Sang Hyup Lee

    (Southeastern Louisiana University)

  • Luis Gutiérrez

    (Universidad del Rosario)

Abstract

Using a survey data from more than 6,000 micro-enterprises in Chile, this study attempts to identify potential determinants of formality and micro-entrepreneurs' motivations for the norm compliance. Our logit estimation results suggest that the motivations of micro-entrepreneurs for norm compliance is attributable not only to their individual and entrepreneurial characteristics such as education and managerial capital but also to other imputable business and financial characteristics of micro-enterprises like asset ownership and firm size. Our empirical findings also confirm that the sample Chilean micro-entrepreneurs' motivations to get formal appear to be largely in line with the exit-driven view.

Suggested Citation

  • Sang Hyup Lee & Luis Gutiérrez, 2024. "A logit analysis of norm compliance by micro-enterprises in Chile," Economics Bulletin, AccessEcon, vol. 44(3), pages 1196-1213.
    • Handle: RePEc:ebl:ecbull:eb-24-00365
    as

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    References listed on IDEAS

    as
    1. Suresh de Mel & David McKenzie & Christopher Woodruff, 2009. "Returns to Capital in Microenterprises: Evidence from a Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 423-423.
    2. Rajeev K. Goel & Fahd Rehman, 2020. "What induces firms to subcontract to the informal sector? Evidence from a developing country," Applied Economics Letters, Taylor & Francis Journals, vol. 27(3), pages 178-187, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    entrepreneurship; informal economy; ·micro-enterprises; developing economy; Chile;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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