Does Informality Impact Formal Sector Firms?: A Case Study from Nicaragua

Utilizing the 2010 Nicaraguan Enterprise Survey undertaken by the World Bank, I explore the impact of informal sector firm competition upon focal formal sector firms. The impact upon focal formal firms in relation to informal competitive pressures are influenced by firm maturity, firm location, industry sector, firm legal status, perceptions of informality, firm informal heritage, senior level managerial time spent dealing with the governmental regulatory environment, international quality certification, and web presence. Focal formal sector firm competition with registered firms acting in part informally is also explored.