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This study aims to investigate the factors that affect the likelihood of formalizing informal sector activities in 13 Sub-Saharan African countries, using World Bank enterprise…
Abstract
Purpose
This study aims to investigate the factors that affect the likelihood of formalizing informal sector activities in 13 Sub-Saharan African countries, using World Bank enterprise survey data collected between the periods 2009 and 2018. Notwithstanding the great contribution of the informal economy in Africa, developing countries may stand to gain more if they make inroads in formalizing the informal sector.
Design/methodology/approach
Since the dependent variable is binary taking the value of one if the firm is willing to formalize and zero otherwise, the study will employ a discrete choice probit model.
Findings
Results inter alia show that firms that are more likely to formalize are young, owned by individuals with high levels of education and, have registered before. Governments should therefore target firms that are young and provide them with information about the benefits of registration, and if these firms are owned by experienced and educated individuals, the likelihood for them to register would be high.
Research limitations/implications
The study uses cross sectional data and therefore cannot capture time variant factors affecting the probability to register and also cannot correct effectively for endogeneity.
Practical implications
Governments should therefore target firms that are young and provide them with as much information as possible about the benefits of registration, and if these firms are owned by experienced and educated individuals, the likelihood to convince them to register would be high. They should also reduce the cost of registration so as to improve net benefits in line with the rational exit view.
Social implications
Formalizing informal activities will help improve the performance of these firms, reduce vulnerable employment as well as crime, poverty and inequality. Providing decent operating and working conditions to informal players will reduce social and political unrest.
Originality/value
The African continent is home to many informal firms accounting for roughly 55% of economic activity with 90% of workers eking out a living in a sector that does not respect worker rights, provide decent working conditions and where changes in growth have done little to reduce its size. Regulatory reforms have also been implemented resulting in the number of start-up registration procedures falling from 11 in 2003 to seven in 2019. The uniqueness of Sub Saharan Africa in terms of entrepreneurial culture, political, institutional and economic conditions as well as lack of consensus in the extant empirical literature make this study pertinent.
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Marcela Maestre Matos, Jahir Lombana-Coy and Francisco J. Mesías
This study aims to identify informal institutions for bottom-of-the-pyramid (BoP) business models in the agricultural sector through the case study of banana growers’ cooperatives.
Abstract
Purpose
This study aims to identify informal institutions for bottom-of-the-pyramid (BoP) business models in the agricultural sector through the case study of banana growers’ cooperatives.
Design/methodology/approach
A case study of six banana cooperatives from Colombia was conducted. The research followed a mixed design, using both qualitative and quantitative data and the application of structural equations.
Findings
This study shows that social capital, networking and alliances are essential in BoP businesses.
Originality/value
Authors defined a model of informal institutional factors for the generation of economic and social value in inclusive business, using the new institutional theory and the conceptual development of BoP in agri-business.
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José-María Romero-Rodríguez, María Soledad Ramirez-Montoya, Leonardo David Glasserman-Morales and Magdalena Ramos Navas-Parejo
The aim of this paper was to analyse the creative competence of students before and after a micro-learning experience carried out in a collaborative online international learning…
Abstract
Purpose
The aim of this paper was to analyse the creative competence of students before and after a micro-learning experience carried out in a collaborative online international learning (COIL) environment between Spanish and Mexican university students in the field of education and entrepreneurship.
Design/methodology/approach
A single-group quasi-experimental design with pre-test and post-test measures was adopted. The composition of the group was natural and included a total of 57 students who participated in the COIL experience. The duration was three weeks, where students from both countries were linked together in the development of a micro-learning project. The creativity self-efficacy scale was used as a data collection instrument.
Findings
The micro-learning activities through COIL developed the creative competence of the participating students. In particular, the groups from both universities improved their scores on the creative competence in the post-test compared to the pre-test measure.
Research limitations/implications
The limitations of this study were linked to the sample loss of some cases, as some students did not complete the post-test measure. The main implication of the study was to demonstrate that COIL experiences are suitable for developing certain skills in students, such as creative competence or co-operative work.
Originality/value
COIL experiences break down the barriers of physical space and give students an active role, allowing them to fully develop competences and offering an intercultural perspective, which encourages open-mindedness and understanding of the world.
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