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This paper is the first to use a panel dataset from the African continent to investigate the relationship between formalization and firm outcomes. Instead of applying a binary formality indicator, it constructs a conceptual framework that regards informality as a continuum consisting of four degrees. The quantitative data includes 516 manufacturing enterprises which are analysed through a matched double difference approach. Moreover, the study explores participant observation as well as semi-structured interviews with government officials, experts, and entrepreneurs to explain the quantitative results and to examine additional effects of formalization. It suggests that the most informal firms do not benefit from formalization due to their underlying conditions. Other, more formal enterprises benefit but there is scope for increasing the benefits and decreasing the costs of formalization. Further, an improvement of the costs and benefits is not enough: better institutions are needed.

This paper is the first to use a panel dataset from the African continent to investigate the relationship between formalization and firm outcomes. Instead of applying a binary formality indicator, it constructs a conceptual framework that regards informality as a continuum consisting of four degrees. The quantitative data includes 516 manufacturing enterprises which are analysed through a matched double difference approach. Moreover, the study explores participant observation as well as semi-structured interviews with government officials, experts, and entrepreneurs to explain the quantitative results and to examine additional effects of formalization. It suggests that the most informal firms do not benefit from formalization due to their underlying conditions. Other, more formal enterprises benefit but there is scope for increasing the benefits and decreasing the costs of formalization. Further, an improvement of the costs and benefits is not enough: better institutions are needed.

Using a unique panel survey of enterprises, we examine the relationship between four categories of formalization and firm productivity. We carry out one- and two-step productivity estimations whose robustness we check with matching and doubly robust estimators. The only formalization category that appears to be significantly associated with productivity is tax formalization, i.e. a firm's decision to pay taxes. This positive association only holds for firms that were already more productive and bigger before formalizing than other informal firms. The reason for the insignificance of the remaining three categories is likely to be the insignificant association between formalization and potential benefits of formalization, such as more access to credit, employees, and investments. High taxes and fees linked to formalization seem to outweigh the few to non-existent intermediate benefits of formalization.

Using panel data of manufacturing enterprises in Mozambique between 2012 and 2017, we investigate how changes in perceived quality of governance are related to firms' law compliance. Controlling for firm-level unobserved heterogeneity, we look at three aspects of governance and their components: transparency, security, and infrastructure. We examine which of these have the potential to alter firm compliance behaviour. We find that enterprises' perceptions of transparency are key to law abidance. In particular, higher predictability of changes in the law, better access to legal documents, and regular meetings with state officials improve firm compliance rates. Thus, we confirm results showing that more political participation and government openness increase compliance with regulations, even in a non-democratic context. Additionally, we test whether political legitimacy acts as a mediator or a moderator in this governance-compliance relationship, but find no clear evidence of this being the case. However, we do confirm that legitimacy has an independent effect on firms' compliance with regulations in the context of Mozambique.

Since the initiation of the Doi Moi reforms in 1986, it is widely believed that Vietnam's small and medium enterprises (SMEs) have critical characteristics that contribute to the country's impressive economic and social development over recent decades. Specifically, SMEs represent a source of economic growth, savings, job creation, and increased competition. Despite their vast potential, general knowledge on their characteristics as well as the opportunities and constraints they were facing was lacking, thus making it difficult for evidence-based government policy recommendations to be formulated. This chapter sheds light on the Vietnam SME database covering surveys over 2005–15, and represents the basis for the analytical work in books chapters. The authors outline the purpose behind the data collection—including sample design, firm and owner characteristics, attrition—comparing the data with the characteristics of Vietnam's overall enterprise population.

Myanmar's transition to a market-based economy is accompanied by rapid development of the private manufacturing sector, which has large potential for improving economic growth. The overall success of the sector, however, should not be taken for granted. Future advances will greatly depend on the policy and business environment in which manufacturing activities take place. It is, therefore, important to better understand the business environment and help inform policies conducive to sustainable economic growth. The Central Statistical Organisation (CSO) of the Ministry of Planning and Finance of Myanmar, the United Nations University World Institute for Development Economics Research (UNU-WIDER), and the University of Copenhagen, supported financially by the Government of Denmark, have initiated the project 'Towards Inclusive Development in Myanmar'. The project aims to strengthen evidence-based policy-making and analysis through a rigorous 'Myanmar Micro, Small, and Medium Enterprise Survey' of private manufacturing enterprises. The survey is the first nationally representative survey focusing exclusively on manufacturing enterprises and their employees. The data were collected in 35 townships in all regions and states of the country in 2017. The sample comprises 2,496 enterprises and 6,722 employees and is statistically representative of more than 71,000 manufacturing firms in Myanmar. The resulting matched employer–employee dataset is unique in its ability to provide estimates of individual-level outcomes, alongside company averages and results for both informal and formal businesses. The breadth of information is unprecedented, and it will allow analysts to study enterprise performance and the business environment in Myanmar in depth, including dimensions such as: regulatory framework (e.g. formalization), firm performance, labour force, technology and management characteristics, innovation, investment, sales, access to finance, and perceptions about the constraints and potentials of the business environment.