Determination of the breakeven point for motivation towards the formalization of micro and small commercial companies in lima, peru

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Abstract

By the end of 2020, there were approximately 5.7 million micro or small enterprises in Peru, with approximately 80 percent of them being informal. Despite the extensive literature demonstrating that formalization helps businesses grow to a large extent, this manuscript describes the variables by which informal business owners wish to continue working in that condition. In light of this, the authors propose the break-even point analysis as a motivator for these businesses to formalize. The goal was to see if there was a link between the break-even point and the formalization of micro and small commercial enterprises in Lima, Peru. The authors developed a questionnaire with high levels of validity and reliability, which was administered to a sample of 139 people who declared themselves to be owners of some type of informal business. The data was analyzed using SPSS software, and Pearson's chi-square statistical test yielded an asymptotic significance of 0.009, which, being less than the standard value of 0.050, served as a strong test for the authors' hypothesis, because determining the break-even point has a significant effect on formalizing micro and small commercial enterprises in the context studied (Lima, Peru).

Original languageEnglish
JournalInternational Journal of Entrepreneurship
Volume25
Issue number8
StatePublished - 2021

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