Williams, C.C. orcid.org/0000-0002-3610-1933 and Kosta, B. (2019) Evaluating institutional theories of informal sector entrepreneurship: Some lessons from Albania. Journal of Developmental Entrepreneurship, 24 (02). 1950009. ISSN 1084-9467
Abstract
This paper evaluates three waves of institutional theory that have variously explained participation in informal sector entrepreneurship. The first wave of institutional theory explains informal entrepreneurship as resulting from formal institutional failures. This second wave of theory explains it as resulting from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. Finally, a third wave of theory as resulting from a lack of both vertical and horizontal trust has explained informal entrepreneurship. To evaluate these waves of institutional theory, this study reports evidence from a 2015 survey of businesses in Albania. This finds that 30 percent of turnover of Albanian businesses is under-reported and that this percentage is higher in smaller firms. In terms of the institutional failures that explain participation in informal entrepreneurship, the regression analysis reveals a strong association between annual under-reporting of turnover and the red tape involved in dealing with the tax administration and the frequent visits of tax inspectors. Moreover, it shows both vertical and horizontal trust are strongly associated with participation in informal entrepreneurship. The paper concludes by discussing the theoretical and policy implications.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2019 World Scientific Publishing Company. This is an author-produced version of a paper subsequently published in Journal of Developmental Entrepreneurship. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Informal economy |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 22 Jan 2020 11:33 |
Last Modified: | 02 Sep 2020 00:38 |
Status: | Published |
Publisher: | World Scientific Publishing |
Refereed: | Yes |
Identification Number: | 10.1142/s1084946719500092 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:155906 |