Toward a socio-cognitive theory of informal entrepreneurship: Decomposing entrepreneurial motive


Ramon V. Del Rosario College of Business

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Archival Material/Manuscript

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There is a conventional notion on informal workers exhibiting entrepreneurial qualities to be necessity-driven. Despite its evident size and scope, the informal sector as an enterprise culture is generally viewed as a basic survival activity, with meager contribution to employment or wealth. Few studies have sought to decipher the nature and motives of entrepreneurs operating in the informal sector. To develop a more textured profiling of informal entrepreneurs within the necessity-opportunity typology, institutional theories on informal entrepreneurship are presented, specifying the motivations under which entrepreneurs operate in the informal economy. It is theorized that the opportunity-necessity dualism when depicting informal entrepreneurs is mediated by several institutional factors: public and private regulation, strategic orientation of the informal sector, external forces (e.g. discrimination, economic restructuring, and unemployment), the presence of non-governmental and independent organizations, and associative behavior among entrepreneurs themselves. Data are examined to determine the extent to which informal sector businesses reflect entrepreneurial potential as well as the co-existence of push and pull factors in the fluidity of entrepreneurs' motivations. An analytical presentation of related literature shows the weaknesses and strengths of the different views on informal entrepreneurship, including a challenge for further research.



Entrepreneurial and Small Business Operations


Entrepreneurship; Informal sector (Economics)

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