Determinants of Informal Competition Among Firms in Ethiopia

Abiy Serawitu

doi:doi:10.11648/j.hep.20210604.13

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Determinants of Informal Competition Among Firms in Ethiopia

Abiy Serawitu

Published in International Journal of Health Economics and Policy (Volume 6, Issue 4)

Received: 12 December 2021 Accepted: 27 December 2021 Published: 31 December 2021

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Abstract

The study investigated intensity of informal competition among firms in Ethiopia, using primary data source from the 2015 World Bank Enterprise Surveys for Ethiopia (Ethiopia - Enterprise Survey 2015). The estimated linear probability model (LPM) revealed that the probability prevalence (intensity) of informal competition among firms in Ethiopia is about 38.5%.It indicated that informality is a key problem in Ethiopia. The study also found that prevalence of highest corruption, burden of tax rate and credit access constraint are found to be positively and significantly affecting informal competition of firms in Ethiopia. On the contrary, firm size are found to be negatively and significantly affecting informal competition of firms. Correspondingly, the study revealed that regular inspection and communication of tax officials with firms could not contribute in reducing intensity of informality even if most studies indicated that increase in government enforcement on tax code lead to reduce informality. As many studies indicated that experience of top managers are contributing a lot for reducing informality in an establishment; however, this study exhibited that it does not save firms from informality in Ethiopia. In a nut shell, more research should be conducted as to why tax inspections and experience of top manager could not save firms from informality in Ethiopia.

Published in	International Journal of Health Economics and Policy (Volume 6, Issue 4)
DOI	10.11648/j.hep.20210604.13
Page(s)	127-132
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Informal Competition, Binary Probit, Firm Size

References

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[5]	El de Soto H. 2000. The Mystery of Capital. Basic Books: New York.
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Abiy Serawitu. (2021). Determinants of Informal Competition Among Firms in Ethiopia. International Journal of Health Economics and Policy, 6(4), 127-132. https://doi.org/10.11648/j.hep.20210604.13

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Abiy Serawitu. Determinants of Informal Competition Among Firms in Ethiopia. Int. J. Health Econ. Policy 2021, 6(4), 127-132. doi: 10.11648/j.hep.20210604.13

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AMA Style

Abiy Serawitu. Determinants of Informal Competition Among Firms in Ethiopia. Int J Health Econ Policy. 2021;6(4):127-132. doi: 10.11648/j.hep.20210604.13

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@article{10.11648/j.hep.20210604.13,
  author = {Abiy Serawitu},
  title = {Determinants of Informal Competition Among Firms in Ethiopia},
  journal = {International Journal of Health Economics and Policy},
  volume = {6},
  number = {4},
  pages = {127-132},
  doi = {10.11648/j.hep.20210604.13},
  url = {https://doi.org/10.11648/j.hep.20210604.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.hep.20210604.13},
  abstract = {The study investigated intensity of informal competition among firms in Ethiopia, using primary data source from the 2015 World Bank Enterprise Surveys for Ethiopia (Ethiopia - Enterprise Survey 2015). The estimated linear probability model (LPM) revealed that the probability prevalence (intensity) of informal competition among firms in Ethiopia is about 38.5%.It indicated that informality is a key problem in Ethiopia. The study also found that prevalence of highest corruption, burden of tax rate and credit access constraint are found to be positively and significantly affecting informal competition of firms in Ethiopia. On the contrary, firm size are found to be negatively and significantly affecting informal competition of firms. Correspondingly, the study revealed that regular inspection and communication of tax officials with firms could not contribute in reducing intensity of informality even if most studies indicated that increase in government enforcement on tax code lead to reduce informality. As many studies indicated that experience of top managers are contributing a lot for reducing informality in an establishment; however, this study exhibited that it does not save firms from informality in Ethiopia. In a nut shell, more research should be conducted as to why tax inspections and experience of top manager could not save firms from informality in Ethiopia.},
 year = {2021}
}

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TY  - JOUR
T1  - Determinants of Informal Competition Among Firms in Ethiopia
AU  - Abiy Serawitu
Y1  - 2021/12/31
PY  - 2021
N1  - https://doi.org/10.11648/j.hep.20210604.13
DO  - 10.11648/j.hep.20210604.13
T2  - International Journal of Health Economics and Policy
JF  - International Journal of Health Economics and Policy
JO  - International Journal of Health Economics and Policy
SP  - 127
EP  - 132
PB  - Science Publishing Group
SN  - 2578-9309
UR  - https://doi.org/10.11648/j.hep.20210604.13
AB  - The study investigated intensity of informal competition among firms in Ethiopia, using primary data source from the 2015 World Bank Enterprise Surveys for Ethiopia (Ethiopia - Enterprise Survey 2015). The estimated linear probability model (LPM) revealed that the probability prevalence (intensity) of informal competition among firms in Ethiopia is about 38.5%.It indicated that informality is a key problem in Ethiopia. The study also found that prevalence of highest corruption, burden of tax rate and credit access constraint are found to be positively and significantly affecting informal competition of firms in Ethiopia. On the contrary, firm size are found to be negatively and significantly affecting informal competition of firms. Correspondingly, the study revealed that regular inspection and communication of tax officials with firms could not contribute in reducing intensity of informality even if most studies indicated that increase in government enforcement on tax code lead to reduce informality. As many studies indicated that experience of top managers are contributing a lot for reducing informality in an establishment; however, this study exhibited that it does not save firms from informality in Ethiopia. In a nut shell, more research should be conducted as to why tax inspections and experience of top manager could not save firms from informality in Ethiopia.
VL  - 6
IS  - 4
ER  -

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Abiy Serawitu

Development Economics, African Leadership Excellence Academy, Addis Ababa, Ethiopia

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APA Style

Abiy Serawitu. (2021). Determinants of Informal Competition Among Firms in Ethiopia. International Journal of Health Economics and Policy, 6(4), 127-132. https://doi.org/10.11648/j.hep.20210604.13

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ACS Style

Abiy Serawitu. Determinants of Informal Competition Among Firms in Ethiopia. Int. J. Health Econ. Policy 2021, 6(4), 127-132. doi: 10.11648/j.hep.20210604.13

Copy | Download

AMA Style

Abiy Serawitu. Determinants of Informal Competition Among Firms in Ethiopia. Int J Health Econ Policy. 2021;6(4):127-132. doi: 10.11648/j.hep.20210604.13

Copy | Download

@article{10.11648/j.hep.20210604.13,
  author = {Abiy Serawitu},
  title = {Determinants of Informal Competition Among Firms in Ethiopia},
  journal = {International Journal of Health Economics and Policy},
  volume = {6},
  number = {4},
  pages = {127-132},
  doi = {10.11648/j.hep.20210604.13},
  url = {https://doi.org/10.11648/j.hep.20210604.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.hep.20210604.13},
  abstract = {The study investigated intensity of informal competition among firms in Ethiopia, using primary data source from the 2015 World Bank Enterprise Surveys for Ethiopia (Ethiopia - Enterprise Survey 2015). The estimated linear probability model (LPM) revealed that the probability prevalence (intensity) of informal competition among firms in Ethiopia is about 38.5%.It indicated that informality is a key problem in Ethiopia. The study also found that prevalence of highest corruption, burden of tax rate and credit access constraint are found to be positively and significantly affecting informal competition of firms in Ethiopia. On the contrary, firm size are found to be negatively and significantly affecting informal competition of firms. Correspondingly, the study revealed that regular inspection and communication of tax officials with firms could not contribute in reducing intensity of informality even if most studies indicated that increase in government enforcement on tax code lead to reduce informality. As many studies indicated that experience of top managers are contributing a lot for reducing informality in an establishment; however, this study exhibited that it does not save firms from informality in Ethiopia. In a nut shell, more research should be conducted as to why tax inspections and experience of top manager could not save firms from informality in Ethiopia.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Informal Competition Among Firms in Ethiopia
AU  - Abiy Serawitu
Y1  - 2021/12/31
PY  - 2021
N1  - https://doi.org/10.11648/j.hep.20210604.13
DO  - 10.11648/j.hep.20210604.13
T2  - International Journal of Health Economics and Policy
JF  - International Journal of Health Economics and Policy
JO  - International Journal of Health Economics and Policy
SP  - 127
EP  - 132
PB  - Science Publishing Group
SN  - 2578-9309
UR  - https://doi.org/10.11648/j.hep.20210604.13
AB  - The study investigated intensity of informal competition among firms in Ethiopia, using primary data source from the 2015 World Bank Enterprise Surveys for Ethiopia (Ethiopia - Enterprise Survey 2015). The estimated linear probability model (LPM) revealed that the probability prevalence (intensity) of informal competition among firms in Ethiopia is about 38.5%.It indicated that informality is a key problem in Ethiopia. The study also found that prevalence of highest corruption, burden of tax rate and credit access constraint are found to be positively and significantly affecting informal competition of firms in Ethiopia. On the contrary, firm size are found to be negatively and significantly affecting informal competition of firms. Correspondingly, the study revealed that regular inspection and communication of tax officials with firms could not contribute in reducing intensity of informality even if most studies indicated that increase in government enforcement on tax code lead to reduce informality. As many studies indicated that experience of top managers are contributing a lot for reducing informality in an establishment; however, this study exhibited that it does not save firms from informality in Ethiopia. In a nut shell, more research should be conducted as to why tax inspections and experience of top manager could not save firms from informality in Ethiopia.
VL  - 6
IS  - 4
ER  -

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