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Evaluating The Implications Of Starting-Up Unregistered On Future Firm Performance: Evidence A 2019 Survey In Albania

Author

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  • COLIN C. WILLIAMS

    (Sheffield University Management School (SUMS), University of Sheffield, Conduit Road, Sheffield S10 1FL, UK)

  • BRUNILDA KOSTA

    (Management Department, Faculty of Economics, University of Tirana, Arben Broci Road, 1000 Tirana, Albania)

Abstract

This paper evaluates critically the relationship between starting-up unregistered and firm performance. The widespread belief across all the dominant theories of informal entrepreneurship is that unregistered start-ups experience poorer future firm performance than those registered from the outset of their operations. To evaluate this poorer performance thesis, this paper reports World Bank Enterprise Survey (WBES) data on 377 enterprises in Albania collected in 2019. After controlling for other determinants of firm performance, the finding is that formal enterprises that started-up unregistered have significantly higher annual sales growth than enterprises that registered from the outset. To explain this, the argument is that in weak institutional environments, such as Albania, the advantages of operating unregistered at the outset outweigh the benefits of registration. The result is a call to re-theorize firm performance in the informal sector and for policy to shift toward a more facilitating approach that enhances benefits of registration.

Suggested Citation

  • Colin C. Williams & Brunilda Kosta, 2020. "Evaluating The Implications Of Starting-Up Unregistered On Future Firm Performance: Evidence A 2019 Survey In Albania," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 25(02), pages 1-17, June.
    • Handle: RePEc:wsi:jdexxx:v:25:y:2020:i:02:n:s1084946720500107
    DOI: 10.1142/S1084946720500107
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    Citations

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    Cited by:

    1. Colin C Williams, 2021. "Tackling Undeclared Self-Employment in South-East Europe: from Deterrents to Preventative Policy Measures," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 280-298, July.
    2. Cavotta, Valeria & Dalpiaz, Elena, 2022. "Good apples in spoiled barrels: A temporal model of firm formalization in a field characterized by widespread informality," Journal of Business Venturing, Elsevier, vol. 37(2).
    3. Esther Salvi & Frank-Martin Belz & Sophie Bacq, 2023. "Informal Entrepreneurship: An Integrative Review and Future Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(2), pages 265-303, March.

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