Informal Entrepreneurship in Developing Economies: The Impacts of Starting Up Unregistered on Firm Performance

27 Pages Posted: 6 Sep 2017

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Alvaro Martinez‐Perez

University of Sheffield

Abbi M. Kedir

University of Leicester - Department of Economics

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Date Written: September 2017

Abstract

To advance understanding of the entrepreneurship process in developing economies, this article evaluates whether registered enterprises that initially avoid the cost of registration, and focus their resources on overcoming other liabilities of newness, lay a stronger foundation for subsequent growth. Analyzing World Bank Enterprise Survey data across 127 countries, and controlling for other firm performance determinants, registered enterprises that started up unregistered and spent longer operating unregistered are revealed to have significantly higher subsequent annual sales, employment, and productivity growth rates compared with those that registered from the outset. The theoretical and policy implications are then discussed.

Suggested Citation

Williams, Colin and Martinez‐Perez, Alvaro and Kedir, Abbi M., Informal Entrepreneurship in Developing Economies: The Impacts of Starting Up Unregistered on Firm Performance (September 2017). Entrepreneurship Theory and Practice, Vol. 41, Issue 5, pp. 773-799, 2017. Available at SSRN: https://ssrn.com/abstract=3031030 or http://dx.doi.org/10.1111/etap.12238

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‐Perez

University of Sheffield ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

Abbi M. Kedir

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

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