Narrow Results

Thailand has experienced a decline in income inequality coupled with unimpressive economic growth since the end of the 1997/98 Asian financial crisis. This paper uses the structuralist approach to understand how these concurrent economic phenomena have become deeply intertwined. We argue that this intertwining results from Thailand’s economic structure, manifesting two types of dualism: (i) the dualism of the formal–informal sectors and (ii) the dualism of the dynamic–stagnant sectors. A decline in the informal sector in recent years coincides with a decrease in income inequality. Further, the second type of dualism between the dynamic and stagnant sectors has emerged since 2000. The stagnant sectors’ employment share has grown faster than that of the dynamic sectors, resulting in a slowdown in economic growth and less inequality. The decline of the informal sector and the rise of the stagnant sectors are the primary engines weighing down economic growth and reducing income inequality in Thailand.

It is widely reported that entrepreneurial activity has a significant role to play in transition economies such as Central and Eastern Europe but little is known about the role that the family unit plays in facilitating small business emergence in the former command economies. This is surprising given that the link between family and small business development has been widely researched in market economies. In this study, attention is drawn to the role that family relations and resources play in small business emergence. The study focuses on Bulgaria, a country in the Balkans with much cultural diversity and which became a European Union member in 2007–8. Analysis is undertaken of research material drawn from a survey of 69 small firms. 42% of the surveyed firms are two generation businesses involving the entrepreneur and children or parents. 35% of the businesses are three generation businesses involving the lead entrepreneur, parents, children and siblings. The remaining 33% are firms that are run by couples and/or siblings. This suggests that the family household is the key channel for (and of) small business formation. In neglecting the role of family start-ups, this gives a false understanding to the role that households and families sometimes contribute to the economy. At the same time, it is also partly because of this dependency on family relations and resources that small businesses become rooted in the 'informal economy' — an economy that is based on family favours and which it is difficult to break out of.

The importance of social networks in setting-up and running a business is well established in the literature. Experts on informality have concluded that with the development of a country, the informal sector will increasingly turn formal. However, evidence from this study indicates otherwise. This study looks at Surat in India which is one of the largest textile producing cities internationally. The industrial district has numerous informal establishments that form a part of the crucial ecosystem, working in cohesion with the more established ‘formal’ firms. The study examines the roles that social networks play in sustaining the textile industry. The research infers that social networks are crucial to run a business in the Surat textile market as all transactions take place through informal contracts, which are grounded on trust-based ‘references’, thereby making a strong network structure a key requirement.

This research provides empirical insights to reveal how value convergence occurs within Uber’s sharing economy. Uber’s business model is built on a digital platform that links private vehicle owners and their under-utilized assets to be economic revenue generating units for on-demand transport requests from potential clients. By analyzing adoption values for drivers and users of Uber, we identify antecedent operational and behavioral values for Uber adoption. We add to extant Industry 4.0 research and show value convergence emanating from economic and convenience motives. On the basis of our findings, we develop propositions for value convergence leveraging on cyber-physical systems embedded in Industry 4.0, and its application for theory and practice within the broader domains of the sharing economy.

This study analyzes the drivers and constraints affecting enterprise capacity utilization (CU) in the Middle East and North Africa (MENA) region. We used data from the World Bank Enterprise Survey and a fractional logit model to examine the impacts of institutional, infrastructural, and sustainability factors on firms’ CU. Our analysis highlights corruption and competition in the informal sector as significant impediments to firms’ CU, alongside complex infrastructure barriers that hinder the optimization. Conversely, environmental responsibility and innovation emerge as critical drivers for enhancing CU. Surprisingly, top managers’ experience introduces a counteractive influence that negatively affects CU. Beyond the empirical findings, this study’s implications extend to various stakeholders, notably policymakers. Emphasizing the need to address corruption, foster an enabling business environment, strategically invest in infrastructure, promote sustainability initiatives, and foster innovation to enhance CU are paramount. Additionally, providing targeted managerial training to mitigate negative managerial influences is crucial. Implementing these recommendations promises to foster an environment conducive to improved CU, driving economic growth, and sustainable development in the MENA region and benefiting stakeholders across sectors.

Social capital is thought to be an important source of social cohesion and a key ingredient for socioeconomic expansion in developing nations. We study its role among street vendors and their money lenders in Caracas, an illegal business based solely on trust and social bonds. We analyzed demand and supply of credit by informal street vendors and money lenders, exploring the relationship between street vendors' assets, income generated, financial and human capital and financial strategies, and those of the money lenders. We found that street vendors' main source of working capital were money lenders, despite charging the highest interest rate. The kind and amount of credit was not correlated to higher incomes. On the supply side, we found that money lenders based their business almost exclusively on trust and manage all clients personally, which limits the growth of their business. This study suggests that the main constraint for increased productivity in the informal sector is not the cost of capital, but the transaction costs involved in accessing credit and a lack of legal enforcements, and that improvement of the lending business is difficult without institutional support.

Even though entrepreneurs are commonly depicted as risk takers, little evaluation has occurred on whether they weigh the costs of being caught and the level of punishments, and engage in off-the-books working practices. The aim of this paper is to evaluate the degree to which entrepreneurs engage in such off-the-books work. Reporting a survey conducted in Moscow during late 2005 and early 2006 of 81 entrepreneurs (defined here as individuals starting-up an enterprise in the past three years), just 3.7 percent are found to operate on a wholly legitimate basis. The remaining 96.3 percent have not registered their business, have no license to trade and conduct all of their trade on an off-the-books basis. The outcome is a call to move beyond the wholesome and virtuous ideal-type of legitimate super heroes that pervade textbook depictions of entrepreneurs and toward a fuller understanding of the lived realities of entrepreneurship.

Studies on women entrepreneurs in the informal economy no longer view them merely as a residue from some pre-modern mode of production that is disappearing. Instead, they are either read through a structuralist lens as marginalized populations engaged in low quality work conducted under poor conditions for low pay out of necessity in the absence of alternative means of livelihood, or through a neo-liberal lens as engaged in relatively higher quality endeavours more as a rational choice. The aim of this paper is to evaluate critically these contrasting explanations. To do this, the results of face-to-face interviews with 323 women entrepreneurs operating in the Indian informal economy are analyzed. The finding is that although the structuralist representation is largely appropriate for women engaged in informal waged work, it is not as valid for women informal entrepreneurs working on a self-employed basis where incomes are higher, they receive more credit from informal institutions, union membership is higher, and such work is more likely to be a rational choice. The outcome is a call to recognize the diversity of women's experiences in the informal sector and that not all informal entrepreneurship by women in developing nations is a low-paid, necessity-oriented endeavour carried out as a last resort.

In recent years, there has been growing recognition in the entrepreneurship literature that many entrepreneurs operate in the informal economy and that not all these informal entrepreneurs are doing so out of economic necessity and because of a lack of choice. Instead, it has been asserted that some of these informal entrepreneurs choose to exit the formal economy and trade on an off-the-books basis more as a matter of choice. However, until now most research displaying this has been conducted in advanced western and post-socialist economies. Little has been written on whether this is also the case in third (majority) world countries. This paper starts to fill this gap by evaluating informal entrepreneurs' motives in sub-Saharan Africa. Reporting the results of face-to-face structured interviews with 80 informal entrepreneurs in Ghana, the finding is that the majority, especially the women informal entrepreneurs, are predominantly necessity-driven while those who are principally intentional participants in informal entrepreneurship are men. However, many women who initially entered informal entrepreneurship out of necessity have over time become more opportunity-driven entrepreneurs. The outcome is a call for wider research in other global regions on informal entrepreneurs' motives and whether similar gender variations prevail.

Despite the significant contributions of women in economic development nationally, the unrecognized attitude of the government, lack of existing legal framework and policies, vagaries of informal economy and changes in the social–economic landscape have accounted largely for the closure of female enterprises in the informal economy. Using Yoruba female textile traders as a case study because these women have broken the "glass ceiling" and made a success of their textile trading, this paper examined the dynamics of entry and motivations of Yoruba women in textile trading. The paper synthesized Social Capital Theory by Coleman and Social Action Theory by Max Weber to explain the issue. It utilized a qualitative method of data collection. Eight focus group discussions and forty in-depth interviews were used to collect information from the women participants who were purposively chosen. The data reveal that parents, family/kinship members and friends had great influence in the strategic entry of women into textile trading in the Balogun market and the subsequent development of women's entrepreneurial activities. Yoruba female textile traders were motivated into textile trading because of economic and cultural values attached to the trade. This data is essential toward policy formulation for women's entrepreneurial development in the informal economy. This paper argues that any policies implemented for women entrepreneurs in the informal economy must be conceived, formulated and implemented with an in-depth understanding of the nuanced elements in the cultural domain within the social system, which the existing literature has yet to capture.

The aim of this paper is to evaluate the varying level of employment in informal sector enterprises across the globe and to undertake an exploratory analysis of the wider economic and social conditions associated with greater levels of informalization. Examining International Labor Organization surveys conducted in 43 countries, the finding is that the main job of just under one in three (31.5 percent) non-agricultural workers is in an informal sector enterprise. Conducting an exploratory analysis of the correlation between countries with higher levels of employment in informal sector enterprises and economic under-development ('modernization' thesis), higher taxes, corruption and state interference ('neo-liberal' thesis) and inadequate state intervention to protect workers from poverty ('structuralist' thesis), the finding is that there is a need to synthesize various tenets from all three perspectives. The outcome is a tentative call for a 'neo-modernization' perspective, which posits that higher levels of employment in informal sector enterprises are associated with economic under-development, public sector corruption and inadequate state intervention to protect workers from poverty.

There is a growing appreciation for the value and impact of the informal economy on the lives and livelihood of many in developing economies. A key question for researchers has been whether those operating in it do so out of necessity or voluntarily as opportunity seekers? Unlike previous studies that have examined the informal economy as one large block, this paper took a slightly different tangent. First, we analyzed and identified three distinct sub-groups within the informal entrepreneurial sector — the street walker (st. walker), the street corner (st. corner) and store owner (st. owner) — and then examined each group's motives. Reporting the results of face-to-face structured interviews with 200 informal entrepreneurs in Cameroon (West Africa), the finding is that the majority, especially st. walker and st. corner informal entrepreneurs, are predominantly necessity-driven while st. owner entrepreneurs are predominantly opportunity-driven. Our study also revealed a progression pattern whereby st. walkers do progress to st. corner and ultimately to st. owner entrepreneurs. The assumption is that this does create a learning curve effect in the entrepreneurial abilities and effectiveness of store owners. This is an area for future research. There are policy implications for institutional support that can grow the informal economy into the formal economy.

The aim of this paper is to review the various policy options, approaches and measures that can be used to address informal entrepreneurship. To do this, it first reviews four possible policy options, namely taking no action, eradicating informal entrepreneurship, moving formal entrepreneurship into the informal economy, or transforming informal entrepreneurship into formal entrepreneurship. Revealing that transforming informal entrepreneurship into formal entrepreneurship is not only the most viable option but also the approach most commonly adopted by supra-national agencies and national governments, a review is then undertaken of how this can be achieved using either direct controls, which seek to increase the costs of informal entrepreneurship and/or the benefits of formal entrepreneurship, or indirect controls that seek to generate a commitment to compliance and greater self-regulation. It is then revealed how these approaches and their accompanying policy measures are not mutually exclusive and can be combined in various ways, exemplified by the responsive regulation and slippery slope approaches. The outcome is a comprehensive review and evaluation of the various policy options, approaches and measures available to policy makers for addressing informal entrepreneurship along with some recommendations regarding the way forward.

We propose that, at a fundamental level, social isolation in its many forms (geographical, cultural and information-based) is a key barrier to entrepreneurial opportunity and success, not only by preventing access to material resources and markets, but also to ideas and information about products and services. Multi-modal data (survey and archival) from more than 150 entrepreneurs in contemporary rural India suggest an entrepreneur’s travel footprint is associated with the profitability of micro enterprises, even after accounting for village-level differences, and that the communication facilities and information sources available in the village interact with travel effects. The positive effect of travel on profit endures even after accounting for other known correlates of profit: infrastructure, information and communication.

There are many underlying reasons justifying the importance of researching the informal economy from the academic and the practical perspectives. Evidence suggests that commercial activities generated by the informal economy could constitute an average of thirty percent of all commercial activities across the world with informal entrepreneurship consuming a big chunk of such activities. This research will focus on exploring the antecedents of informal entrepreneurship in Egypt as a developing country that is still undergoing a complicated political and economic phase that started in the financial crisis of 2008 passing by the revolution in 2011 and the subsequent corrective revolution in 2013.

In recent years, recognition that bogus self-employment is rapidly growing, not least because of the advent of what has been called the ‘gig,’ ‘sharing’ or ‘collaborative’ economy, has led governments to search for ways to tackle this form of dependent self-employment that is widely viewed as diminishing the quality of working conditions. Until now, however, there have been few ex-post evaluations of policy initiatives that seek to tackle this phenomenon. Therefore, the aim of this paper is to provide one of the first ex-post evaluations by examining the outcomes of a 2016 legislative initiative in Romania to tackle bogus self-employment. Reporting both descriptive statistics and OLS regression analysis on monthly official data from August 2014 to August 2016, the finding is that while other business types and waged employment rates followed a similar trend to the years before the introduction of the new legislation, the number of self-employed started a negative trend after the new legislation was announced. After controlling for other indicators related to the economy (i.e. GDP) and labor market (i.e. employees, other companies, vacancy rates), the impact of the new legislation on the self-employed remains negative, offering reasonable grounds for assuming bogus self-employed was lowered by the new legislation. The paper concludes by discussing the wider implications of these findings.

The aim of this paper is to contribute to an understanding of the entrepreneurship process in Africa by evaluating the link between starting up unregistered and future firm performance. The widespread assumption has been that firms starting up unregistered in the informal economy suffer from poor performance compared to those starting up registered and in the formal economy. To test this poorer performance thesis, World Bank Enterprise Survey (WBES) data is evaluated from across 41 African countries covering the period from 2006 to 2013. Controlling for a comprehensive set of other determinants of firm performance, the finding is that formal enterprises with five or more employees that started up unregistered have significantly higher annual sales, employment and productivity growth rates compared with those firms that registered their operations at startup. The paper concludes by discussing the theoretical and policy implications of this finding.

This study involves the analysis of the scientific outputs on informal entrepreneurship (IE hereafter) over the period from 1990 to 2016. We deploy a combination of bibliometric techniques such as citations, bibliographic coupling as well as approaching the social networks established. We sourced the contents thus analyzed from the online Thomson/Reuters-ISI database and the online Scopus database run by the Elsevier Publishing Company, which returned a total of 44 and 95 publications for analysis, respectively. From among the 139 articles analyzed, the journals Entrepreneurship and Regional Development and Journal of Developmental Entrepreneurship stand out as the publishers of the largest number of articles. We encounter studies on IE in developing countries as a low-income activity that contributes to the economic development of the region. The motivations and the determinants of informality are common to the majority of the scientific outputs and effectively serving as the analytical basis either for arguing in favor of the formalization of the business. Another aspect present in the literature interrelates IE with the quality of governance and economic liberalization. This analysis facet ensures IE gains in scientific profile within the ongoing context of discussions over neoliberalism and its effects on the world economy.

The aim of this paper is to evaluate four competing theoretical perspectives that explain cross-national variations in the level of informal sector entrepreneurship. Scholarship has until now argued that informal entrepreneurship is a result of either: economic under-development and a lack of modernization of governance (modernization theory); high taxes and state over-interference (neo-liberal theory); inadequate state intervention to protect workers from poverty (political economy theory) or the asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions (institutional theory). Reporting the World Bank Enterprise Survey (WBES) on the varying prevalence of informal entrepreneurship across 142 countries, the finding is that neo-liberal theory is refuted but the tenets of the modernization, political economy and institutional theories are confirmed. Informal entrepreneurship is found to be significantly higher when there is economic under-development, a lack of modernization of governance, inadequate state intervention to protect workers from poverty and greater asymmetry between the formal and informal institutions. The paper concludes by discussing the theoretical and policy implications of these findings.

In recent years, a new institutionalist theory has emerged to explain the prevalence of informal sector entrepreneurship. This argues that formal institutional failures lead to the emergence of an asymmetry between the formal rules (laws and regulations) and the norms, values and beliefs of entrepreneurs regarding the acceptability of participating in the informal sector, which in turn leads to the prevalence of informal entrepreneurship. The aim of this paper is to evaluate this social actor approach by reporting evidence from 453 face-to-face interviews with a nationally representative sample of entrepreneurs in FYR Macedonia. This reveals not only a significant association between participation in the informal economy and the non-alignment of entrepreneurs’ views with the formal rules, but specific formal institutional failings that are significantly associated with the acceptability of informal entrepreneurship, namely poor quality public services, a lack of tax fairness, corruption and instability in the formal institutions. The theoretical and policy implications are then discussed.