Enforcement of regulation,irregular sector,and firm performance: a computational agent-based model |
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Authors: | Luigi Bonaventura |
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Institution: | (1) Department of Economics, Bosphorus University, Bebek, 34342 Istanbul, Turkey;(2) Reform Corporate, Istanbul, Turkey;(3) New York University, New York, NY, USA |
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Abstract: | This paper investigates how enforcement of regulation affects the size of the irregular sector, firm performance and the exit
rate to the market. Three kinds of enforcement policy will be tested in the model: control, punish and legitimacy. The first
policy is based on the number of inspectors present in the economy; the second is defined by the magnitude of punishment;
the third is measured by social legitimacy. Results show the negligible influence of control to fight irregularity; the strong
effect of punishment on the irregular sector and on the exit rate; the good effect of legitimacy policy in promoting regularity
but low output performance. |
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Keywords: | |
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