Why do Firms Operate Informally? Insights from a Systematic Literature Review
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| Format: | Artículo científico |
| Language: | en |
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Universidad Nacional de Colombia
2022
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| _version_ | 1876478318912471040 |
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| author | Florencia Verónica Pedroni |
| author_facet | Florencia Verónica Pedroni |
| contents | Why do Firms Operate Informally? Insights from a Systematic Literature Review Florencia Verónica Pedroni Gabriela Pesce Anahí Briozzo Administración y Contabilidad tax compliance Firm informality institutional theory corporate tax evasion underreporting revenues This paper investigates factors that motivate entrepreneurs to completely operate within informality and the drivers of formal companies to underreport revenues. In particular, this work identifies and organizes the determinants of firm informality through a systematic literature review in Scopus and Web of Science databases. The article presents several contributions. First, it examines the two main frameworks of informality (structuralist/exclusion and legalistic/exit dimensions) and links this with the different roles of unregistered firms in economic development (survival, De Soto, and parasite views). It also studies the theoretical basis of informality, including economic, institutional, psychological, and sociological aspects. Second, the paper summarizes business informality determinants based on studies with different methodological approaches (macro, microeconomic), contexts (developed, emerging, transition economies), and periods (1983-2018). Our results show that firm informality is mostly addressed in the examined literature as a decision or voluntary choice by companies and entrepreneurs (legalistic vision). Third, the article proposes an integral theoretical model, according to which the firm informality level is determined by structural elements (company and entrepreneur's characteristics) and environmental factors (corruption, bureaucracy, taxes, etc.). The analysis is relevant for researchers studying this subject and for policymakers as well. 2022 artículo científico 0121-5051 https://www.redalyc.org/articulo.oa?id=81870307010 https://www.redalyc.org/journal/818/81870307010/ https://www.redalyc.org/journal/818/81870307010/html/ https://www.redalyc.org/journal/818/81870307010/81870307010.epub https://www.redalyc.org/journal/818/81870307010/movil 10.15446/innovar.v32n83.99451 en http://www.redalyc.org/revista.oa?id=818 INNOVAR. Revista de Ciencias Administrativas y Sociales application/pdf Universidad Nacional de Colombia INNOVAR. Revista de Ciencias Administrativas y Sociales (Colombia) Num.83 Vol.32 |
| format | Artículo científico |
| id | redalyc_81870307010 |
| institution | Redalyc |
| language | en |
| publishDate | 2022 |
| publisher | Universidad Nacional de Colombia |
| spellingShingle | Why do Firms Operate Informally? Insights from a Systematic Literature Review Florencia Verónica Pedroni Administración y Contabilidad tax compliance Firm informality institutional theory corporate tax evasion underreporting revenues Why do Firms Operate Informally? Insights from a Systematic Literature Review Florencia Verónica Pedroni Gabriela Pesce Anahí Briozzo Administración y Contabilidad tax compliance Firm informality institutional theory corporate tax evasion underreporting revenues This paper investigates factors that motivate entrepreneurs to completely operate within informality and the drivers of formal companies to underreport revenues. In particular, this work identifies and organizes the determinants of firm informality through a systematic literature review in Scopus and Web of Science databases. The article presents several contributions. First, it examines the two main frameworks of informality (structuralist/exclusion and legalistic/exit dimensions) and links this with the different roles of unregistered firms in economic development (survival, De Soto, and parasite views). It also studies the theoretical basis of informality, including economic, institutional, psychological, and sociological aspects. Second, the paper summarizes business informality determinants based on studies with different methodological approaches (macro, microeconomic), contexts (developed, emerging, transition economies), and periods (1983-2018). Our results show that firm informality is mostly addressed in the examined literature as a decision or voluntary choice by companies and entrepreneurs (legalistic vision). Third, the article proposes an integral theoretical model, according to which the firm informality level is determined by structural elements (company and entrepreneur's characteristics) and environmental factors (corruption, bureaucracy, taxes, etc.). The analysis is relevant for researchers studying this subject and for policymakers as well. 2022 artículo científico 0121-5051 https://www.redalyc.org/articulo.oa?id=81870307010 https://www.redalyc.org/journal/818/81870307010/ https://www.redalyc.org/journal/818/81870307010/html/ https://www.redalyc.org/journal/818/81870307010/81870307010.epub https://www.redalyc.org/journal/818/81870307010/movil 10.15446/innovar.v32n83.99451 en http://www.redalyc.org/revista.oa?id=818 INNOVAR. Revista de Ciencias Administrativas y Sociales application/pdf Universidad Nacional de Colombia INNOVAR. Revista de Ciencias Administrativas y Sociales (Colombia) Num.83 Vol.32 |
| title | Why do Firms Operate Informally? Insights from a Systematic Literature Review |
| topic | Administración y Contabilidad tax compliance Firm informality institutional theory corporate tax evasion underreporting revenues |
| url | https://www.redalyc.org/articulo.oa?id=81870307010 https://www.redalyc.org/journal/818/81870307010/ https://www.redalyc.org/journal/818/81870307010/html/ https://www.redalyc.org/journal/818/81870307010/81870307010.epub https://www.redalyc.org/journal/818/81870307010/movil |