"Serious firms have more incentives for innovation when a competitive informal sector is present". This statement was made by Pedro Mendi, a researcher at the Navarra Center of International Development (NCID) in the Institute for Culture and Society, at the University of Navarra. The expert presented his work "Informality and Innovation" at a seminar.

This paper focuses on the relationship between the competitiveness facing informal firms and the innovative activities in serious firms. Its content is based on data from the World Bank business report.

It is assumed that the informal sector produce goods of lower quality than those of the formal or serious sector" pointed out Prof. Mendi, who has found a positive correlation between the introduction of innovation and the intensity of competitiveness with informal sector enterprises.

Presentation in United Nations, University (Maastrich)

Using this as a starting point, he has built a model of competence with vertically differentiated goods so as to explain the results of the research. In this way, the study proposes a model with a formal monopolist sector versus the competition of the informal sector, in order to observe which conditions are needed for greater incentives for innovating.

Pedro Mendi presented his article in the United Nations at the University of Maastricht, invited by Pierre Mohain, professor at this center and associated member of the Centre Interuniversitaire de Recherche en Analyse des Organisations (CIRANO), Canadá

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