Article ID Journal Published Year Pages File Type
981920 Procedia Economics and Finance 2013 10 Pages PDF
Abstract

This paper tests the implications of a simple equilibrium model that describes informal economy in Lebanon. The results suggest that informal firms are less productive, managed by less educated entrepreneurs, are smaller and are facing less inspection from the tax department and the social security audits, which we verify in the data. The paper also investigates how the quality of legal enforcement, captured by the likelihood of detection in the informal sector, affects firm's decision to be formal or informal.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics