Entrepreneurship in the Informal Economy: Commercial or Social Entrepreneurs?

International Entrepreneurship and Management Journal, (2012) Vol. 8 No.3, pp. 309-324

16 Pages Posted: 21 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Sara Nadin

University of Liverpool

Date Written: 2012

Abstract

Recent research has revealed that a large proportion of entrepreneurs startup their ventures operating on a wholly or partially off-the-books basis. Until now, it has been commonly assumed that those who operate in the informal economy are exclusively commercial entrepreneurs. They are assumed to be rational economic actors who weigh up the benefits of operating off-the-books against the costs of being caught and decide to operate in this manner. The aim of this paper is to evaluate critically this a priori assumption. Reporting evidence from a 2005/6 survey involving face-to-face interviews with 102 informal entrepreneurs in Moscow in Russia, the finding is that such entrepreneurs are not purely commercially driven. Examining their rationales, informal entrepreneurs are found to range from purely rational economic actors pursuing for-profit logics through to purely social entrepreneurs pursuing purely social logics, with the majority somewhere inbetween combining both for-profit and social rationales. Neither do their logics remain static over time. What begins as a commercial entrepreneurial venture may become more socially oriented over time or vice versa. So too do their logics vary socio-spatially. Those living in deprived populations are more socially-orientated, whilst those in relatively affluent populations are comparatively more profit-driven. The outcome is a call for a more nuanced explanation of the complex and heterogeneous logics of informal entrepreneurs.

Keywords: Informal sector, Commercial entrepreneurship, Social entrepreneurship, Enterprise culture, Moscow

JEL Classification: H26, J46, J48, K34, K42, O17

Suggested Citation

Williams, Colin and Nadin, Sara, Entrepreneurship in the Informal Economy: Commercial or Social Entrepreneurs? (2012). International Entrepreneurship and Management Journal, (2012) Vol. 8 No.3, pp. 309-324, Available at SSRN: https://ssrn.com/abstract=2706189

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

Sara Nadin

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom

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