Theorising the Hidden Enterprise Culture: The Nature of Entrepreneurship in the Shadow Economy

Abstract

This paper evaluates critically competing theories that variously represent entrepreneurship in the shadow economy as a residue from a previous mode of production (modernisation theory), a survival strategy for those marginalised from the circuits of the modern economy (structuralist theory), a voluntarily chosen endeavour pursued due to over-regulation in the legitimate economy (neo-liberal theory) or a practice chosen for social, redistributive, resistance or identity reasons (post-structuralist theory). Reporting evidence from 861 face-to-face interviews in English localities, it is shown that no one theory is universally applicable. Instead, all are revealed to be valid with regard to various forms of shadow entrepreneurship, and only by integrating them is it possible to develop a finer-grained more inclusive comprehension of this multi-faceted and complex hidden enterprise culture.

Keywords: entrepreneurship, enterprise culture, enterprise development, business start-up, informal sector, shadow economy, underground economy, tax non-compliance, England

JEL Classification: O17, H26, H31