Why formalize? Examining the context of Peruvian women microentrepreneurs

Abstract

Purpose

In Latin America, the growing participation of women microentrepreneurs who continue to operate in the informal sector stands out. The purpose of this study is to analyse if the context where the business is developed influences the gender perspective in the decision of the microentrepreneur to remain in the informal sector, mainly in Peru, which registers high rates of informality in businesses led by women.

Design/methodology/approach

The National Household Survey for the period 2014–2021 is used with a sample of 63,020 micro and small Peruvian companies that have been in operation for more than three years. The data is analysed with the logistic regression technique.

Findings

The results show that microenterprises run by women are less likely to be formal. However, this situation would change if these businesses were larger. In addition, women microentrepreneurs face limitations in accessing resources, and their businesses frequently run from their homes, allowing them to hide their activities from regulatory bodies.

Originality/value

The context of Peruvian women microentrepreneurs who have been in operation for over three years and who persist in informality is analysed. It is essential to know the characteristics of this sector to formulate policies that encourage the formalization of companies, particularly in Latin America, incorporating gender differences.

Citation

Silupu, B., Usero, B. and Montoro, M.A. (2024), "Why formalize? Examining the context of Peruvian women microentrepreneurs", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 18 No. 6, pp. 1364-1383. https://doi.org/10.1108/JEC-07-2023-0124