Determinants of the Level of Informality of Informal Micro-Enterprises: Some Evidence from the City of Lahore, Pakistan

15 Pages Posted: 13 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Alvaro Martinez

University of Sheffield

Muhammad Shehryar

Lahore University of Management Sciences (LUMS)

Date Written: 2015

Abstract

Recognizing that enterprises operate at varying levels of informality, this paper evaluates the determinants of their degree of informality. Reporting a 2012 survey of 300 informal micro-enterprises in the city of Lahore in Pakistan, the finding is that the key predictors of their level of informality are the characteristics of the entrepreneur and enterprise, rather than their motives or the wider formal and informal institutional compliance environment. Lower degrees of informality are associated with women, older, educated and higher income entrepreneurs and older enterprises with employees in the manufacturing sector. The paper concludes by discussing the theoretical and policy implications.

Keywords: entrepreneurship, informal sector, micro-enterprise, Asia, Pakistan

JEL Classification: H26, J46, K42, O17

Suggested Citation

Williams, Colin and Martinez, Alvaro and Shehryar, Muhammad, Determinants of the Level of Informality of Informal Micro-Enterprises: Some Evidence from the City of Lahore, Pakistan (2015). World Development, October 2015, Available at SSRN: https://ssrn.com/abstract=2702738

Colin Williams (Contact Author)

University of Sheffield - School of Management ( email )

15 Conduit Road
Sheffield, S10 1FL
United Kingdom

HOME PAGE: http://https://www.sheffield.ac.uk/management/staff/williams/index

Alvaro Martinez

University of Sheffield ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

Muhammad Shehryar

Lahore University of Management Sciences (LUMS) ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

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