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Enterprise Surveys

Shedding light on the informal economy: A different methodology and new data

Filip Jolevski's picture

In Mozambique’s three largest cities (Maputo, Beira, and Nampula), informal businesses—those operating outside formal licensing and registration procedures—outnumber formal firms by a factor of 9 to 1. The World Bank’s Enterprise Analysis Unit recently published surveys of informal businesses in Mozambique, conducted in collaboration with the country management unit and colleagues from the Finance, Competition, and Innovation Global Practice. These surveys were designed to mirror the standard World Bank Enterprise Surveys, which cover the formal sector, but were tailored to better understand the unique conditions in which informal firms operate. Thanks to recent methodological innovation in sampling techniques, these surveys now also provide an estimate of the total number of informal businesses.
 
The surveys use stratified adaptive cluster sampling methods—a method commonly used in the field of biology—that allow researchers to efficiently study subjects that cluster near each other. In practice, the method is implemented as follows: first, we take a city such as the capital city Maputo, and divide it into 150 by 150 meter squares—each stratified based on the likely concentration of informal business activities (see the illustration below). Second, we randomly select a pre-defined number of squares for a full enumeration of all informal businesses in each. The process is adaptive in the sense that enumeration is expanded to all adjacent squares if the number of informal firms found in any square is above a pre-defined threshold. This method allows for the same unbiased precision as stratified random sampling (Thompson 1990) but it can be implemented at a lower cost and with reduced fieldwork. Informal businesses tend to operate in close proximity to one another, forming clusters of economic activity.

Figure 1: Primary Sampling Units (Squares) for Maputo

Does firm size matter for productivity? The case of informal firms in Africa

Asif Islam's picture
There are two fairly accepted empirical observations. First, formal firms are more productive and larger than informal firms. Second, in the formal sector, large firms are more productive than small firms. Should it then follow that, ceteris paribus, the productivity gap between the formal and informal sector firms narrows as informal firms become larger? Alternatively, as far as productivity is concerned, is formalization a simple march from small to large firms or is there more to it than that?

Getting women to the top of the career ladder through education

Asif Islam's picture

In the face of significant social and cultural barriers, it is tempting to be cynical about a role for education in promoting women managers in developing economies. Consider the number of factors that could come in the way: nationally, cultural and social attitudes may discourage the career advancement of women, and at the firm-level, male-dominated informal networks and cultures can act as barriers. Furthermore, even if all these obstacles were somehow removed, the lack of good quality education itself, and skills mismatches can pose problems.
 
But, in spite of all this, education remains a crucial founding block for career success. After all, one needs an education in the first place to get to a point where these other factors can undercut the likelihood of career progression. Therefore, without access to education, one may stumble even before the climb up the career ladder begins.

When do firms call it quits?

David Francis's picture
The entry and exit of firms in the private sector, so-called “firm turnover,” can be an indication of a healthy market, if that means scarce resources are re-allocated from less to more productive firms.  Such churning can be substantial in dynamic economies; in the U.S, for instance, according to recent work by the Brookings Institution, “… one new business is born about every minute, while another one fails every eighty seconds.”[1] Underneath this churning is substantial re-allocation of resources across firms and sector of the eco

What Are Some Key Challenges That Firms Experience in Turkey?

Veselin Kuntchev's picture

One of the primary goals of the Enterprise Surveys (ES) is to provide high quality data about the business environment based on the experiences of firms. Given how little is known about the private sector in developing economies, this provides much needed information. 

The recently released Turkey Enterprise Survey consists of 1344 firms across seven regions and nine business sectors. Firms interviewed for the ES are formal private firms operating in non-agricultural, non-extractive private sector with five or more employees. In this post we will focus on a few highlights for the standard ES firms.

Issues with Power Supply, Access to Finance, and Corruption are hindering firms in DRC

Silvia Muzi's picture

The goal of the Enterprise Surveys (ES) is to portray the quality of the business environment in the economy by asking a set of questions that capture both the experiences and perceptions of firms. Little is known about what businesses experience in emerging and developing economies and the Enterprise Surveys intend to some extent alleviate this knowledge gap. Below we provide highlights of the recently released data for the Democratic Republic of Congo

Do Nepali businesses have more female managers compared to other countries?

Arvind Jain's picture

One of the primary goals of the Enterprise Surveys is to provide high quality data about the business environment based on establishments’ actual day-to-day experiences. This provides much needed information given how little is known about what businesses experience in developing economies. To raise awareness of the recently released Nepal 2013 Enterprise Survey, we provide a few highlights below. 
 
The Nepal 2013 Enterprise Survey consists of face-to-face interviews with 482 firms across the Central, Western, and Eastern regions in Nepal. Fieldwork was conducted between February and June 2013, with survey questions referencing the 2013 fiscal year. This post will focus on a couple of highlights. For the full survey highlights please see the Nepal 2013 Country Highlights document.

What are the top obstacles for Bangladeshi businesses?

Arvind Jain's picture

One of the primary goals of the Enterprise Surveys is to provide high quality data about the business environment based on establishments’ actual day-to-day experiences. This provides much needed information given how little is known about what businesses experience in developing economies. To raise awareness of the recently released Bangladesh 2013 Enterprise Survey, we provide a few highlights of the surveys below. 

Is it time we shifted our attention and research to the informal sector’s firm size?

Mohammad Amin's picture

Looking at the literature on informality, one thing that stands out is the small size of the informal firms. In fact, firm-size is one of the criteria used by ILO and individual researchers to draw the line between formal and informal firms. Many informal firms, however defined, are operated by the owner herself or himself and without any other employees, with few having more than five employees.

How is Ukraine's Private Sector Performing?

Mohammad Amin's picture

Information on the situation prior to the outbreak of the crisis is critical for understanding the current situation in Ukraine. As far as economics is concerned, macro-economic data--such as income per capita and unemployment rates-- is definitely important but it does not necessarily capture various dimensions of the business climate and the actual experiences of private agents in dealing with the government. Other factors play a big role, for example, how often do firms pay bribes to obtain licenses and permits in Ukraine? Have these unofficial payments increased over time? In order to answer these questions, we must zero in on what actual firms really experience.

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