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THE IMPACTS OF INFORMALITY ON ENTERPRISE INNOVATION, SURVIVAL AND PERFORMANCE: SOME EVIDENCE FROM PAKISTAN

SANA ULLAH

School of Economics, Quaid-i-Azam University Islamabad, Pakistan

E-mail Address: sana_ullah133@yahoo.com

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COLIN C. WILLIAMS

Management School, University of Sheffield, Conduit Road, S10 1FL, UK

E-mail Address: C.C.Williams@sheffield.ac.uk

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BABUR WASIM ARIF

Department of Social Sciences, Iqra University, Islamabad, Pakistan

E-mail Address: babur.wasim@iqraisb.edu.pk

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https://doi.org/10.1142/S1084946719500158Cited by:15 (Source: Crossref)

Abstract

The aim of this paper is to evaluate the relationship between informality, innovation and firm survival. To do so, a study of a cluster of electrical fittings firms in Pakistan is reported. Reporting bivariate and multivariate probit models to analyze two surveys conducted between 2008 and 2017, the finding is that there is a significant relationship between informality and the extent of innovation, firm survival and firm performance. Informality has an adverse negative effect on firm-level innovation, firm survival and firm performance. Given that formal enterprises in this cluster are better performing in terms of innovation, survival and employment growth than informal businesses, the paper concludes by discussing the theoretical, policy and research implications.

Keywords:

References

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Vol. 24, No. 03

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History

Received 1 May 2019

Revised 1 August 2019

Published: September 2019

Keywords

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Is there innovation in enterprises operating in the informal sector?

What is it about?

The aim of this paper is to evaluate the relationship between informality, innovation and firm survival. To do so, a study of a cluster of electrical fittings ﬁrms in Pakistan is reported.

Why is it important?

Reporting bivariate and multivariate probit models to analyze two surveys conducted between 2008 and 2017, the finding is that there is a significant relationship between informality and the extent of innovation, firm survival and firm performance. Informality has an adverse negative effect on firm-level innovation, firm survival and firm performance. Given that formal enterprises in this cluster are better performing in terms of innovation, survival and employment growth than informal businesses, the paper concludes by discussing the theoretical, policy and research implications.

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THE IMPACTS OF INFORMALITY ON ENTERPRISE INNOVATION, SURVIVAL AND PERFORMANCE: SOME EVIDENCE FROM PAKISTAN

Abstract

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