Informal Economy

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Colin C Williams - One of the best experts on this subject based on the ideXlab platform.

  • explaining and tackling the Informal Economy a dual Informal labour market approach
    Employee Relations, 2018
    Co-Authors: Colin C Williams, Slavko Bezeredi
    Abstract:

    Purpose To transcend the long-standing debate regarding whether workers are driven into the Informal Economy by either their involuntary “exclusion” or voluntary “exit” from the formal Economy, the purpose of this paper is to propose and evaluate the existence of a dual Informal labour market composed of an exit-driven “upper tier” and an exclusion-driven “lower-tier” of Informal workers, and to explore its policy implications. Design/methodology/approach To do so, data are reported from a 2015 survey of the Informal Economy conducted in South-East Europe involving 6,019 face-to-face interviews in Bulgaria, Croatia and FYR Macedonia. Findings Identifying a dual Informal labour market with three exit-driven Informal workers for every exclusion-driven Informal worker, a multinomial logit regression analysis reveals that, compared to the exclusion-driven “lower tier”, the exit-driven “upper tier” is significantly more likely to be populated by the formally employed, retired and those not struggling financially. Participation is not affected by the perceived severity of penalties and likely risks of detection, but relative to those in the exclusion-driven “lower tier”, there is a significant correlation between those doing so for exit rationales and their lack of both horizontal trust and vertical trust in formal institutions. Practical implications The outcome is a call to transcend the conventional deterrence approach of increasing the penalties and risks of detection. Instead, to tackle those driven by exit rationales, tackling both the lack of horizontal trust that other citizens are operating in a compliant manner and the lack of vertical trust in formal institutions is advocated. To tackle exclusion-driven Informal workers, meanwhile, a focus upon the macro-level economic and social conditions which lead to their participation is required. Originality/value This is the first paper to empirically evaluate the existence of a dual Informal labour market and to evaluate its policy implications.

  • tackling employment in the Informal Economy a critical evaluation of the neoliberal policy approach
    Economic & Industrial Democracy, 2017
    Co-Authors: Colin C Williams
    Abstract:

    This article evaluates critically the neoliberal perspective that employment in the Informal Economy is a product of high taxes, public sector corruption and state interference in the free market a...

  • an institutional theory of the Informal Economy some lessons from the united kingdom
    International Journal of Social Economics, 2016
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic
    Abstract:

    Purpose – The purpose of this paper is to propose a new way of explaining participation in the Informal Economy as resulting from the asymmetry between the codified laws and regulations of a society’s formal institutions (government morality) and the norms, values and beliefs of the population that constitute its Informal institutions (societal morality). The proposition is that the greater the asymmetry between government morality and societal morality, the greater is the propensity to participate in the Informal Economy. Design/methodology/approach – To evaluate this institutional asymmetry theory, the results are reported of 1,306 face-to-face interviews conducted during 2013 in the UK. Findings – The finding is a strong correlation between the degree of institutional asymmetry (measured by tax morale) and participation in the Informal Economy. The lower the tax morale, the greater is the propensity to participate in the Informal Economy. Using ordered logistic regression analysis, tax morale is not fo...

  • explaining participation in the Informal Economy in post socialist societies a study of the asymmetry between formal and Informal institutions in croatia
    Journal of Contemporary Central and Eastern Europe, 2016
    Co-Authors: Colin C Williams, Josip Franic
    Abstract:

    AbstractThis paper proposes a new way of explaining the Informal Economy in post-socialist societies. Drawing upon evidence from 1,000 face-to-face interviews conducted in Croatia during 2013, and using stepwise Tobit regression analysis, the finding is that after controlling for other explanatory variables, participation in the Informal Economy results from the asymmetry between the norms, values and beliefs of citizens (Informal institutions) and the codified laws and regulations (formal institutions). Reducing such institutional asymmetry is thus required if the Informal Economy is to be tackled. How this can be achieved in post-socialist societies is then discussed.

  • cross country variations in the participation of small businesses in the Informal Economy an institutional asymmetry explanation
    Journal of Small Business and Enterprise Development, 2016
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic
    Abstract:

    Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the Informal Economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of Informal institutions (civic morality), the greater is the propensity of small businesses to participate in the Informal Economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed. Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28). Findings – The finding is that small businesses display a greater propensity to engage in this Informal wage...

Ioana Alexandra Horodnic - One of the best experts on this subject based on the ideXlab platform.

  • an institutional theory of the Informal Economy some lessons from the united kingdom
    International Journal of Social Economics, 2016
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic
    Abstract:

    Purpose – The purpose of this paper is to propose a new way of explaining participation in the Informal Economy as resulting from the asymmetry between the codified laws and regulations of a society’s formal institutions (government morality) and the norms, values and beliefs of the population that constitute its Informal institutions (societal morality). The proposition is that the greater the asymmetry between government morality and societal morality, the greater is the propensity to participate in the Informal Economy. Design/methodology/approach – To evaluate this institutional asymmetry theory, the results are reported of 1,306 face-to-face interviews conducted during 2013 in the UK. Findings – The finding is a strong correlation between the degree of institutional asymmetry (measured by tax morale) and participation in the Informal Economy. The lower the tax morale, the greater is the propensity to participate in the Informal Economy. Using ordered logistic regression analysis, tax morale is not fo...

  • cross country variations in the participation of small businesses in the Informal Economy
    Journal of Small Business and Enterprise Development, 2016
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic
    Abstract:

    Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the Informal Economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of Informal institutions (civic morality), the greater is the propensity of small businesses to participate in the Informal Economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed. Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28). Findings – The finding is that small businesses display a greater propensity to engage in this Informal wage...

  • cross country variations in the participation of small businesses in the Informal Economy an institutional asymmetry explanation
    Journal of Small Business and Enterprise Development, 2016
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic
    Abstract:

    Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the Informal Economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of Informal institutions (civic morality), the greater is the propensity of small businesses to participate in the Informal Economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed. Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28). Findings – The finding is that small businesses display a greater propensity to engage in this Informal wage...

  • explaining participation in the Informal Economy an institutional incongruence perspective
    Social Science Research Network, 2015
    Co-Authors: Colin C Williams, Ioana Alexandra Horodnic, Jan Windebank
    Abstract:

    Drawing inspiration from institutional theory, a small sub-stream of literature has proposed that participation in the Informal Economy arises from the lack of alignment of a society’s formal institutions (i.e. its codified laws and regulations) with its Informal institutions (i.e. the norms, values and beliefs of its population). To further advance this explanation, this article reports a 2013 Eurobarometer survey involving 27,563 face-to-face interviews across 28 European countries. The finding is that there is a strong association between the degree to which formal and Informal institutions are unaligned and participation in the Informal Economy. The greater is the asymmetry between the formal and Informal institutions, the more likely is participation in the Informal Economy at the individual-, population group- and country-level. A new policy approach for tackling the Informal Economy which focuses upon reducing this institutional incongruence is then discussed.

John Round - One of the best experts on this subject based on the ideXlab platform.

  • a critical evaluation of romantic depictions of the Informal Economy
    Social Science Research Network, 2008
    Co-Authors: Colin C Williams, John Round
    Abstract:

    The conventional portrayal of the formal/Informal Economy dichotomy endows the formal Economy with positive attributes and the Informal Economy with negative characteristics. Recently, this hierarchy has been inverted by scholars portraying the Informal Economy positively as a chosen alternative and path to progress. This paper evaluates critically this emergent representation. Reporting a study of the Informal Economy in Ukraine conducted in 2005/06, a diverse array of Informal economic practices are identified that amongst some groups represent an involuntary means of livelihood but amongst others a chosen alternative and some of which seem beneficial and others deleterious to economic development and social cohesion. The outcome is a call to transcend simplistic binary hierarchical depictions of the formal Economy as “bad”/Informal Economy ias “good” (or the inverse) and towards towards a finer-grained and more and more nuanced understanding of the diverse forms of Informal work and their varying consequences for economic development and social cohesion.

  • a critical evaluation of romantic depictions of the Informal Economy
    Review of Social Economy, 2008
    Co-Authors: Colin C Williams, John Round
    Abstract:

    Abstract The conventional portrayal of the formal/Informal Economy dichotomy endows the formal Economy with positive attributes and the Informal Economy with negative characteristics. Recently, this hierarchy has been inverted by scholars portraying the Informal Economy positively as a chosen alternative and path to progress. This paper evaluates critically this emergent representation. Reporting a study of the Informal Economy in the Ukraine conducted in 2005/2006, a diverse array of Informal economic practices are identified that amongst some groups represent an involuntary means of livelihood but amongst others a chosen alternative and some of which seem beneficial and others deleterious to economic development and social cohesion. The outcome is a call to transcend simplistic binary hierarchical depictions of the formal Economy as “bad”/Informal Economy as “good” (or the inverse) and towards a finer-grained and more nuanced understanding of the diverse forms of Informal work and their varying conseque...

  • re thinking the nature of the Informal Economy some lessons from ukraine
    Social Science Research Network, 2007
    Co-Authors: Colin C Williams, John Round
    Abstract:

    This article provides a critical evaluation of the competing discourses that variously represent the Informal Economy as a residue or leftover of some pre-capitalist era, a by-product of a new type of emergent formal Economy, an alternative mode of work organization or a complement to the formal Economy. Drawing upon evidence from a study of 600 households in Ukraine that unravels the heterogeneous forms of work in the Informal Economy, the finding is that although each and every representation is wholly valid in relation to specific types of Informal work, no one articulation fully captures the diverse nature and multiple meanings of the Informal Economy. Here, in consequence, it is contended that only by using all of them will a finer-grained and more comprehensive understanding of the complex and multifarious character of the Informal Economy be achieved. To display how this can be achieved, a conceptual framework is then presented that couples together these contrasting representations in order to provide a more multi-layered and nuanced depiction of the Informal Economy, followed by a discussion of the implications for urban and regional development and policy of recognizing the multiple and diverse types of Informal work.

  • entrepreneurship and the Informal Economy a study of ukraine s hidden enterprise culture
    Social Science Research Network, 2007
    Co-Authors: Colin C Williams, John Round
    Abstract:

    How many entrepreneurs start-up their business ventures conducting some or all of their trade in the Informal Economy? The aim of this paper is to answer this key question that has been seldom addressed using data from 600 face-to-face structured interviews conducted in Ukraine in late 2005 and early 2006. Analyzing the 331 entrepreneurs identified (i.e., individuals starting-up an enterprise in the past three years), just 10 percent operate on a wholly legitimate basis, while 39 percent have a license to trade and/or have registered their business but conduct a portion of their trade in the Informal Economy, and 51 percent operate unregistered enterprises and conduct all of their trade on an off-the-books basis. Given that some 90 percent of all business start-ups operate partially or wholly in the Informal Economy, and that 40 percent of all respondents depend on the Informal Economy as either their principal or secondary contributor to their livelihoods, the paper concludes by considering the wider implications of these findings both for further research and public policy.

Justin W Webb - One of the best experts on this subject based on the ideXlab platform.

  • toward a greater understanding of entrepreneurship and strategy in the Informal Economy
    Strategic Entrepreneurship Journal, 2014
    Co-Authors: Justin W Webb, Duane R Ireland, David J Ketchen
    Abstract:

    The Informal Economy consists of business activities that occur outside of formal institutional boundaries but within the boundaries of Informal institutions. A large gap exists between the significant importance of the Informal Economy to commerce around the world and the small amount of Informal Economy research with which entrepreneurship and strategic management scholars have been involved. As a step toward filling this gap, this special issue includes four articles with the potential to significantly advance our understanding of business activities within the Informal Economy. In introducing these four articles, we discuss the myriad activities that fall within the boundaries of the Informal Economy and distinguish between the institutional foundations of Informality in developed versus developing economies. The articles included within the special issue each offer a unique understanding of how entrepreneurs are influenced by and manage their institutional contexts in various Informal Economy settings, providing contributions that should give rise to a series of promising future research questions. Copyright © 2014 Strategic Management Society.

  • toward a research agenda for the Informal Economy a survey of the strategic entrepreneurship journal s editorial board
    Strategic Entrepreneurship Journal, 2014
    Co-Authors: David J Ketchen, Duane R Ireland, Justin W Webb
    Abstract:

    Scholarly attention to strategy and entrepreneurship within the Informal Economy appears to be on the rise, but a large gap remains between the importance of the Informal Economy and the amount of research that is devoted to it. The survey reported herein is an effort to offer insights to researchers who wish to help build the knowledge base about strategy and entrepreneurship within the Informal Economy. Specifically, we surveyed members of the Strategic Entrepreneurship Journal's editorial board regarding what they view as the most promising theories, research questions, and methods to leverage in order to develop greater understanding of the Informal Economy. Board members' views vary, but in general institutional theory and network theory are seen as the best perspectives to fuel major contributions at this time. The research questions that attracted the strongest support centered on the boundaries of and interchanges between the formal and Informal economies. Finally, field interviews, case studies, and ethnography were ranked as the most promising investigative methods. Taken together, these findings offer a possible agenda for research into the Informal Economy. Copyright © 2014 Strategic Management Society.

  • research on entrepreneurship in the Informal Economy framing a research agenda
    Journal of Business Venturing, 2013
    Co-Authors: Justin W Webb, Laszlo Tihanyi, Garry D Bruton, Duane R Ireland
    Abstract:

    The Informal Economy consists of economic activities that occur outside of formal institutional boundaries but which remain within Informal institutional boundaries for large segments of society. We draw from diverse disciplines to frame research concerning entrepreneurship in the Informal Economy around three separate theories: institutional theory, motivation-related theories from a sociological perspective, and resource allocation theory. Each of these theories provides a complementary lens through which to examine the incentives, constraints, motivations, strategies, and abilities of entrepreneurs to operate and grow their ventures in the Informal Economy. Employing these theoretical perspectives facilitates efforts to highlight the breadth of Informal Economy research in different domains and lays foundations for future entrepreneurship research.

  • you say illegal i say legitimate entrepreneurship in the Informal Economy
    2009
    Co-Authors: Justin W Webb, Laszlo Tihanyi, Duane R Ireland, David G Sirmon
    Abstract:

    The entrepreneurial process drives economic activities in the formal Economy; however, little is known theoretically about how the entrepreneurial process works in the Informal Economy. To address this theoretical gap, we employ a multi-level perspective integrating entrepreneurship theory (micro-level) with institutional (macro-level) and collective identity (meso-level) theories to examine the role institutions and collective identity play in the recognition and exploitation of opportunities in the Informal Economy. Additionally, we explore factors that influence transition to the formal Economy.

  • you say illegal i say legitimate entrepreneurship in the Informal Economy
    Academy of Management Review, 2009
    Co-Authors: Justin W Webb, Laszlo Tihanyi, Duane R Ireland, David G Sirmon
    Abstract:

    The entrepreneurial process drives economic activities in the formal Economy; however, little is known theoretically about how the entrepreneurial process works in the Informal Economy. To address this theoretical gap, we employ a multilevel perspective integrating entrepreneurship theory (microlevel) with institutional (macrolevel) and collective identity (mesolevel) theories to examine the role institutions and collective identity play in the recognition and exploitation of opportunities in the Informal Economy. Additionally, we explore factors that influence the transition to the formal Economy.

Duane R Ireland - One of the best experts on this subject based on the ideXlab platform.

  • toward a greater understanding of entrepreneurship and strategy in the Informal Economy
    Strategic Entrepreneurship Journal, 2014
    Co-Authors: Justin W Webb, Duane R Ireland, David J Ketchen
    Abstract:

    The Informal Economy consists of business activities that occur outside of formal institutional boundaries but within the boundaries of Informal institutions. A large gap exists between the significant importance of the Informal Economy to commerce around the world and the small amount of Informal Economy research with which entrepreneurship and strategic management scholars have been involved. As a step toward filling this gap, this special issue includes four articles with the potential to significantly advance our understanding of business activities within the Informal Economy. In introducing these four articles, we discuss the myriad activities that fall within the boundaries of the Informal Economy and distinguish between the institutional foundations of Informality in developed versus developing economies. The articles included within the special issue each offer a unique understanding of how entrepreneurs are influenced by and manage their institutional contexts in various Informal Economy settings, providing contributions that should give rise to a series of promising future research questions. Copyright © 2014 Strategic Management Society.

  • toward a research agenda for the Informal Economy a survey of the strategic entrepreneurship journal s editorial board
    Strategic Entrepreneurship Journal, 2014
    Co-Authors: David J Ketchen, Duane R Ireland, Justin W Webb
    Abstract:

    Scholarly attention to strategy and entrepreneurship within the Informal Economy appears to be on the rise, but a large gap remains between the importance of the Informal Economy and the amount of research that is devoted to it. The survey reported herein is an effort to offer insights to researchers who wish to help build the knowledge base about strategy and entrepreneurship within the Informal Economy. Specifically, we surveyed members of the Strategic Entrepreneurship Journal's editorial board regarding what they view as the most promising theories, research questions, and methods to leverage in order to develop greater understanding of the Informal Economy. Board members' views vary, but in general institutional theory and network theory are seen as the best perspectives to fuel major contributions at this time. The research questions that attracted the strongest support centered on the boundaries of and interchanges between the formal and Informal economies. Finally, field interviews, case studies, and ethnography were ranked as the most promising investigative methods. Taken together, these findings offer a possible agenda for research into the Informal Economy. Copyright © 2014 Strategic Management Society.

  • research on entrepreneurship in the Informal Economy framing a research agenda
    Journal of Business Venturing, 2013
    Co-Authors: Justin W Webb, Laszlo Tihanyi, Garry D Bruton, Duane R Ireland
    Abstract:

    The Informal Economy consists of economic activities that occur outside of formal institutional boundaries but which remain within Informal institutional boundaries for large segments of society. We draw from diverse disciplines to frame research concerning entrepreneurship in the Informal Economy around three separate theories: institutional theory, motivation-related theories from a sociological perspective, and resource allocation theory. Each of these theories provides a complementary lens through which to examine the incentives, constraints, motivations, strategies, and abilities of entrepreneurs to operate and grow their ventures in the Informal Economy. Employing these theoretical perspectives facilitates efforts to highlight the breadth of Informal Economy research in different domains and lays foundations for future entrepreneurship research.

  • toward a research agenda on the Informal Economy
    Academy of Management Perspectives, 2012
    Co-Authors: Garry D Bruton, Duane R Ireland, David J Ketchen
    Abstract:

    Executive Overview Informal firms operate in a shadowy zone where they produce legal goods and services but do not follow legal requirements to register with government authorities. The collective economic activity involving Informal firms, their suppliers, and their customers constitutes the Informal Economy. Although the Informal Economy accounts for a significant percentage of total commerce in many countries, there has been little management research about it. We outline some key issues and questions involving the Informal Economy that management researchers could help to answer, forming a potential research agenda in the process.

  • you say illegal i say legitimate entrepreneurship in the Informal Economy
    2009
    Co-Authors: Justin W Webb, Laszlo Tihanyi, Duane R Ireland, David G Sirmon
    Abstract:

    The entrepreneurial process drives economic activities in the formal Economy; however, little is known theoretically about how the entrepreneurial process works in the Informal Economy. To address this theoretical gap, we employ a multi-level perspective integrating entrepreneurship theory (micro-level) with institutional (macro-level) and collective identity (meso-level) theories to examine the role institutions and collective identity play in the recognition and exploitation of opportunities in the Informal Economy. Additionally, we explore factors that influence transition to the formal Economy.