Explaining Ethnic Minority Immigrant Women’s Motivation for Informal Entrepreneurship: An Institutional Incongruence Perspective

The informal economy has been a popular subject of research across the wider globe. However, there exists a dearth of literature exploring informal entrepreneurship among ethnic minority immigrant women. Different theoretical frameworks have been employed to explain the competing rationales. This study draws from institutional theory and collective identity. The institutional perspective proposes that informal entrepreneurship arises out of institutional asymmetry. By adopting an intersectional gendered lens, this paper evaluates the formal and informal institutional forces which influence women entrepreneurs to engage in informal business ventures. To do so, it reports findings from 25 face-to-face interviews with Pakistani and Bangladeshi women and representatives of local employment support organisations in Newham borough of London. The findings highlight that majority of these women entrepreneurs are engaged in informal homebased businesses mainly because of an interplay of informal and formal institutional forces whereby the former play a dominant role. The resulting incongruence between the formal and informal institutional forces creates opportunities in the informal sector while the collective identity of immigrant women entrepreneurs helps them recognise and exploit these opportunities. The outcome is a call for a new policy approach based on an institutional approach.