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Entrepreneurial Responses to Austerity: The Role of the Informal Sector

Author

Listed:
  • Eghosa Igudia
  • Robert Ackrill
  • Simeon Coleman

Abstract

Limited welfare systems and employment opportunities in the formal sector in many developing countries imply that individuals often seek employment opportunities in the informal sector to mitigate adverse economic circumstances. In this paper, we investigate whether entrepreneurial activity increases during such challenging economic times. We utilise a survey conducted in an emerging market economy to explore the motives for participation in, and the consequences of, the increase in informal economic activity. We find evidence of increased entrepreneurship during periods of austerity policies and posit on the potential effects on economic welfare in developing economies. We conclude by highlighting related-policy issues.

Suggested Citation

  • Eghosa Igudia & Robert Ackrill & Simeon Coleman, 2017. "Entrepreneurial Responses to Austerity: The Role of the Informal Sector," NBS Discussion Papers in Economics 2017/09, Economics, Nottingham Business School, Nottingham Trent University.
    • Handle: RePEc:nbs:wpaper:2017/09
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    References listed on IDEAS

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    More about this item

    Keywords

    Austerity; Entrepreneurship; Informal Economy; Nigeria;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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