- To get connected to public services.
- To get licenses and permits.
- To deal with tax and tax collectors.
- To gain government contracts.
- To deal with customs.
- Other reasons.
The paper concludes:
. . . [T]he firm growth increase after obtaining a business registration license on average outweigh the additional bribe cost of becoming formal; and our analysis shows that this positive registration effect is not driven by self-selection of well-performing firms into formality . . .
Bribes slow down growth and hampers (but does not prevent) formalization. Overall, anti-corruption measures not only contribute to increasing formalization of the economy, but also have the potential of yielding a double dividend on firm performance through direct profit effects.