Working Paper- MSEs Informality and Productivity: Evidence From Egypt

Source: Economic Research Forum
Author(s): Hala Abou-Ali, Reham Rizk

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This paper assesses the impact of informality on household enterprise performance in terms of productivity and size of output. Furthermore, it pinpoints informality determinants with respect to different types of obstacles that impede their growth. The analysis uses the ELMPS 2012 data and finds that a firm’s age and an entrepreneur’s education level have a significant impact on the likelihood of belonging to the informal sector. Moreover, mobile enterprises, agricultural sector and household savings increase the probability of belonging to the informal sector. In sum, the results support the argument that informality has a deterrent impact on the level of productivity and the value of output of household enterprise in Egypt…

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