Evaluating Competing Theories of Informal Entrepreneurship: Some Lessons from Ukraine
International Journal of Entrepreneurial Behaviour & Research, Vol. 18 Iss: 5, 2012, pp. 528-543
17 Pages Posted: 21 Dec 2015
Date Written: 2012
Purpose – This paper evaluates critically the competing theories of informal entrepreneurship that variously represent such endeavour as a residue from a previous mode of accumulation (modernisation theory), a direct by-product of contemporary capitalism and survival strategy for those marginalised from the circuits of the modern economy (structuralism), an endeavour voluntarily pursued due to over-regulation in the formal economy (neo-liberalism) or a practice chosen for social, redistributive, political or identity reasons (post-structuralism).
Design/methodology/approach – To evaluate these competing theories, a 2005/6 survey involving face-to-face interviews with 298 informal entrepreneurs in Ukraine is analysed.
Findings – Contrary to previous studies which assert that one single theorisation is universally applicable, this study finds that each theory is valid for different types of informal entrepreneurship, and therefore proposes a typology of informal entrepreneurship that joins together the contrasting theorisations in order to achieve a more accurate and finer-grained explanation of the complex and heterogeneous configuration of informal entrepreneurship in contemporary Ukraine.
Research implications – This paper reveals the need to move beyond treating the competing explanations as mutually exclusive by outlining a typology that combines the contrasting theorisations in order to more fully understand the heterogeneity of informal entrepreneurship.
Practical/social implications – By unravelling the heterogeneity of informal entrepreneurship, a more nuanced policy approach is shown to be required which does not seek to simply either eradicate such endeavour, pursue a laissez-faire approach or harness such entrepreneurship but instead pursues all these approaches to varying extents in relation to different kinds of informal entrepreneur.
Originality/value – One of the first papers to identify and empirically evaluate the competing theories of informal entrepreneurship.
Keywords: entrepreneurship, enterprise culture, informal sector, underground economy, economic development, Ukraine, post-socialist societies
JEL Classification: H26, J46, K42, O17
Suggested Citation: Suggested Citation