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Determinants of informal entrepreneurship in Africa

Author

Listed:
  • Amanze Ejiogu
  • Obiora Okechukwu
  • Chibuzo Ejiogu
  • Andrews Owusu
  • Ogechi Adeola

Abstract

This study investigates the determinants of informal entrepreneurship in Africa. Using a cross-section of 21,954 firms from 47 African countries, the study estimates several multivariate models to examine the factors that are associated with the decision of firms to register at the start of their operation and the length of time to remain unregistered. The findings show that entrepreneurship in the informal sector is complex and context-bound as contextual factors unique to Africa, such as, corruption, political instability, crime rate, infrastructure (electricity and transportation), and access to land and finance, influence the entrepreneur's decision to register their firm at the start of its operation. The length of time firms remain unregistered is shown to be positively correlated to access to finance and infrastructural availability and negatively related to crime and political instability. These results vary based on the size of the business with larger businesses being impacted less by these variables.

Suggested Citation

  • Amanze Ejiogu & Obiora Okechukwu & Chibuzo Ejiogu & Andrews Owusu & Ogechi Adeola, 2022. "Determinants of informal entrepreneurship in Africa," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 45(1), pages 35-61.
    • Handle: RePEc:ids:ijesbu:v:45:y:2022:i:1:p:35-61
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    Cited by:

    1. Williams, Christopher & Tesfaye Hailemariam, Atsede & Allard, Gayle, 2022. "Exploring entrepreneurial innovation in Ethiopia," Research Policy, Elsevier, vol. 51(10).

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