arbiter
JournalsPricingAccount

Business Environment Distortions, Informal Competition, and Firm Stagnation in Peru

Jose Luis Nolazco

Economia2025https://doi.org/10.18800/economia.202502.003article
ABDC C
Weight
0.50

What the paper says

This paper examines how business environment distortions and informal competition contribute to the persistence of low-scale formal firms in Peru. Using data from the 2015 National Enterprise Survey, the analysis estimates an ordered probit model with instrumental variables to assess these effects. Results show that limited access to working-capital credit and competition from informal businesses increase the probability of being a micro enterprise by 18 and 16 percentage points (pp), respectively. Likewise, complex tax regulations increase this probability by 10 pp, while inadequate infrastructure and institutional weaknesses raise it by 8 pp. However, simultaneous improvements in credit access, tax simplification, and institutional and infrastructure quality could reduce the share of micro enterprises by 39 pp while increasing the shares of small and medium/large enterprises by 27 and 12 pp, respectively.

Open paper page →

Cite this paper

https://doi.org/https://doi.org/10.18800/economia.202502.003

Or copy a formatted citation

@article{jose2025,
  title        = {{Business Environment Distortions, Informal Competition, and Firm Stagnation in Peru}},
  author       = {Jose Luis Nolazco},
  journal      = {Economia},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.18800/economia.202502.003},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Business Environment Distortions, Informal Competition, and Firm Stagnation in Peru

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.