Women entrepreneurs in the informal economy: Is formalization the only solution for business sustainability?
AbstractThe existing marketing, strategy and economics literature have little to offer by way of recommendations to promote entrepreneurship in the informal economy, except to advocate that multinationals, local firms, state and public agencies should work together to bring the informal economy into the fold of the formal economy. In contrast, this paper argues that the business sustainability of women entrepreneurs in the informal economy depends upon their engagements or business partnerships with other women (and men) and women-focussed intermediaries. More than formalization, women entrepreneurs need 'spaces' for dialogue with other women (and men) to learn and build business capabilities. Both the State and firms wanting to penetrate the informal economy can create such spaces through partnerships with NGOs and women-focussed organizations. While formalization of entrepreneurial activity is favourable under some circumstances, it can be detrimental under others - necessitating a case by case evaluation rather than a general rule. In order to ensure the business sustainability of women's ventures in the informal economy, any sort of formalization must occur through a gradual process accompanied by intermediaries. These results are formulated through the compilation and analysis of the existing literature and the study of six detailed case studies of women entrepreneurs from developing countries validated by extensive interviews. The results are then used to propose a closed model of linkages between formal and informal economies which has novel organizational implications for firms competing to establish consumer bases and business partnerships in the Base of Pyramid (BoP) markets of developing countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 018.
Date of creation: 2013
Date of revision:
Informal economy; entrepreneurship; gender; business sustainability;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- B54 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Feminist Economics
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-29 (All new papers)
- NEP-CSE-2013-11-29 (Economics of Strategic Management)
- NEP-CWA-2013-11-29 (Central & Western Asia)
- NEP-ENT-2013-11-29 (Entrepreneurship)
- NEP-IUE-2013-11-29 (Informal & Underground Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Boyd, Robert L., 2005. "Race, gender, and survivalist entrepreneurship in large northern cities during the Great Depression," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 331-339, May.
- Richard Franceys & Almud Weitz, 2003. "Public-private community partnerships in infrastructure for the poor," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 1083-1098.
- Kwame Adom & Colin C. Williams, 2012. "Evaluating The Motives Of Informal Entrepreneurs In Koforidua, Ghana," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1250005-1-1.
- Marina Della-Giusta & Christine Phillips, 2006. "Women entrepreneurs in the Gambia: challenges and opportunities," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1051-1064.
- Chen, Martha Alter, 2005. "Rethinking the Informal Economy: Linkages with the Formal Economy and the Formal Regulatory Environment," Working Paper Series RP2005/10, World Institute for Development Economic Research (UNU-WIDER).
- Miriam Otoo & Joan Fulton & Germaine Ibro & James Lowenberg-Deboer, 2011. "Women Entrepreneurship In West Africa: The Cowpea Street Food Sector In Niger And Ghana," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 37-63.
- Linda Mayoux & Robert Chambers, 2005. "Reversing the paradigm: quantification, participatory methods and pro-poor impact assessment," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(2), pages 271-298.
- Westermann, Olaf & Ashby, Jacqueline & Pretty, Jules, 2005. "Gender and social capital: The importance of gender differences for the maturity and effectiveness of natural resource management groups," World Development, Elsevier, vol. 33(11), pages 1783-1799, November.
- Colin C Williams & Anjula Gurtoo, 2011. "Evaluating Women Entrepreneurs In The Informal Sector: Some Evidence From India," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 351-369.
- Claire Heffernan & Kim Thomson & Louise Nielsen, 2011. "Caste, livelihoods and livestock: An exploration of the uptake of livestock vaccination adoption among poor farmers in India," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(1), pages 103-118, January.
- SadreGhazi, Shuan & Duysters, Geert, 2008. "Serving low-income markets: Rethinking Multinational Corporations’ Strategies," MERIT Working Papers 024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Yueh, Linda, 2009. "China's Entrepreneurs," World Development, Elsevier, vol. 37(4), pages 778-786, April.
- Andy Hall, 2005. "Capacity development for agricultural biotechnology in developing countries: an innovation systems view of what it is and how to develop it," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(5), pages 611-630.
- László Szerb & Gábor Rappai & Zsolt Makra & Siri Terjesen, 2007. "Informal Investment in Transition Economies: Individual Characteristics and Clusters," Small Business Economics, Springer, vol. 28(2), pages 257-271, March.
- Elizabeth Gatewood & Candida Brush & Nancy Carter & Patricia Greene & Myra Hart, 2009. "Diana: a symbol of women entrepreneurs’ hunt for knowledge, money, and the rewards of entrepreneurship," Small Business Economics, Springer, vol. 32(2), pages 129-144, February.
- Lyn S. Amine & Karin M. Staub, 2009. "Women entrepreneurs in sub-Saharan Africa: An institutional theory analysis from a social marketing point of view," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(2), pages 183-211, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten).
If references are entirely missing, you can add them using this form.