Formality factors that influence business growth: empirical analysis in Peruvian SMEs

SMEs are the main source of employment for Peruvians, however, the economic contribution of these organizations in GDP terms is below that of developed countries, employment conditions do not comply with labor regulations and there are high levels of informality in your operations. This research work aims to determine which aspects of the management of SMEs when they are formalized are associated with growth. For these purposes, data from the National Survey of Companies (ENE) published by the INEI, carried out on more than 19,000 Peruvian companies, will be used. This information will be analyzed using the logistic linear regression method and factor analysis. This research work contributes to the knowledge of future entrepreneurs who are planning the creation of an SME and who wish to know what aspects of the organization to formalize and thus be able to speed up the path to growth.

In Peru, at the end of 2018, the INEI registered a total of 2.4 million companies, of which 94.9% are micro-enterprises, 4.2% are small companies. Of this total of companies, 73.6% are natural persons with their own business and the rest are legal companies that are developing economic activities. By the end of 2019, the PEA totaled 24.5 million people, of which 72.4% work in companies with 1 to 10 workers, 7.2% work in companies with 11 to 50 workers, and only 20.3% work in companies with more than 51 workers. ; it is also known that 72.7% of the PEA has an informal job. The majority of SMEs remain in an informal situation. By the end of 2018, SMEs contributed 30.7% to the Value Added of the private sector, while large companies contributed 69.3%. According to SUNAT in Peru there are more than 3.9 million people who do not have a RUC and of these, more than 1.8 million people do not pay taxes. In this context, promoting the formalization of Peruvian SMEs is a main task for economic development; in this way it will be possible to reduce the levels of inequality and the levels of poverty. In the OECD countries informality is 16.06%, in Peru, the informality rate is 58%, a figure higher than the world average and therefore a problem to be analyzed and of national interest.