Informality and Productivity of Micro and Small Enterprises in Cameroon

By Novice Patrick Bakehe

English

The objective of this paper is to analyze the effect of informal operation on the productivity of Cameroonian micro and small enterprises. The estimated model is based on an econometric specification in terms of instrumental variables and uses a micro and small enterprises database of the second National Survey on Employment and the Informal Sector. The sample covers 3524 firms and the surveys were conducted in 2010 by the National Statistics Institute (INS). Our results show that the registration probability (formal operation) of micro and small enterprises weakens when enterprises do not have sites subject to control and entrepreneurs see no advantage in registering their businesses, which adversely affects productivity. This impact is subject to the effects of other important factors relating to the characteristics of the human and social capital of micro and small enterprises.JEL Codes: J24, O17, O23

Keywords

  • micro and small enterprises
  • productivity
  • informal sector
  • instrumental variables
  • developing countries
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