46 Pages Posted: 8 Aug 2016
Date Written: August 5, 2016
This article examines the effects of large inflows of displaced persons (IDPs) resulting from violence on firms' behavior in an economy that contains a large informal sector, as is commonly observed in developing countries. To identify causal effects, we exploit the fact that areas closer to the displaced persons' locations of origin should receive higher immigration inflows. We find that large IDPs induce sizable negative effects on the performance of formal firms. These effects are mainly driven by the positive association between large IDPs and the size of the informal sector.
Keywords: Migration, Firms, Informality
JEL Classification: D22, J61, O17
Suggested Citation: Suggested Citation
Rozo, Sandra V. and Winkler, Hernan, Are Immigration Inflows Good for Business? The Role of Informality in Developing Countries (August 5, 2016). Available at SSRN: https://ssrn.com/abstract=2819225