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Road transport is an important sector of the economy, however, its negative impacts on the environment, human health and sustainability of potential economic growth are significant. Transport externalities tend to be neglected within the market process. The damage generated through significant externalities of road transport in Czechia was identified, based on unique data processing, to reach almost 3.5 billion € annually. This chapter presents an overview of internalization taxes and fees, their current rates and generated receipts. If excise duty is disregarded as fundamentally unsuitable for the internalization of externalities, then the receipts from other applied taxes and fees, particularly the road tax, seem to be insufficient. Although economic growth is encouraged, its form is not sustainable in view of the rising phase of the Kuznets curve and the related irreversible environmental impacts.

This paper aims to examine the factors associated with a household business entrepreneur’s decisions to formalise the firm at a multidimensions level.

The data set is a panel of 2,336 SMEs and household businesses from Vietnamese SME surveys during the 2005–2015 period.

This study elucidates how firm-level resources, entrepreneur characteristics and costs of doing business influence an entrepreneur’s decision to enter, the speed and the degree of formality.

This study provides insight into the origins of an entrepreneur’s decisions to the multidimensions of business formality through the lenses of the resource-based view, entrepreneurship and institution theories.

Globally, the governance has shifted from positivist to the regulatory-centric approach, necessitating accurate contouring of regulatory governance framework. The study proposes a novel approach to unravel the regulatory governance framework in the context of the Indian electronics industry – extendable to other sectors in India and other emerging economies.

The research objective has been operationalized through document analysis and thematic analysis of semi-structured interview transcripts in three steps: (1) arrive at parameters of the regulatory governance framework, (2) identify instruments against each parameter and (3) characterize parameters in terms of dominant instruments and their underlying modalities. The authors have adopted a set of 6 Cs modalities (control, communications, competition, consensus, code and collaboration) and regulatory space theory to analyze existing modalities mix in the dominant instruments.

In summary, the study has (1) identified eight macro and twenty micro regulatory governance parameters, (2) mapped regulatory governance parameters with instruments and institutions (3) revealed the top two dominant modalities for each regulatory governance parameter.

The existing modality characteristics of regulatory governance parameters can be used by manufacturers, investors and other stakeholders to make a realistic assessment of regulatory governance and reduce regulatory risk and regulatory burden.

The multidimensional use of parameters, instruments and modalities broadens the understanding of the existing regulatory governance framework and may assist the regulators in optimizing it to meet market requirements.

The primary objective of this study aims to intensively explore the environment of Indonesian regulations and laws related to the Islamic banking system and micro-, small- and medium-sized enterprises (MSME) and unveil the restrictive laws and regulatory flaws that potentially hinder the Islamic banking institution and MSME industry in achieving financial inclusion and promoting sustainable growth.

This paper implements a qualitative method by implementing a multi-case study research strategy, both from the Islamic banking institutions and the MSME industries. The data were gathered primarily through an interview approach by adopting purposive uncontrolled quota sampling.

The findings of this paper reveal two essential issues: First, the regulatory imbalances and restrictions could demotivate and hinder the efforts of Islamic banks in providing access to finance for the MSME segment, hence, encumbering the achievement of the financial inclusion agenda from the Islamic banking industry. Second, the flaws in MSME registration and taxation might discourage the formal MSMEs from extending their business license and prevent the informal MSME units from registering their business. This issue would potentially lower their chance of accessing external financing from the formal financial institutions and participating in supportive government programmes due to the absence of proper legality.

Since this paper only observed six Islamic banks and 22 MSME units in urban and rural locations in Indonesia using a case study approach, the empirical findings and case discussions were limited to those respective Islamic banks and MSME participants.

By referring to the recommendations as presented in this paper, two critical policy implications could be expected from adopting the proposed recommendations, among others: By addressing the issues of the regulatory imbalance associated with the Islamic banking industry and introduce the deregulatory policies on profit and loss sharing (PLS) scheme implementation, this approach will motivate the Islamic banking industry in serving the MSME sector better and provide greater access to financial services, particularly in using the PLS financing schemes. By resolving the problems on MSME registration and taxation, this strategy will enhance the sustainability of the formal MSMEs’ operation and encourage the informal ones to register, hence, improving their inclusion into the formal financing services and government assistance programmes.

The present study attempts to address the literature shortcomings and helps to fill the gaps – both theoretical and empirical – by incorporating the multi-case study among Indonesian Islamic banks and MSMEs to extensively explore the Indonesia regulatory environment pertaining to the Islamic banking system (supply-side) and MSMEs (demand-side), and thoroughly investigates and reveals the restrictive laws and regulatory flaws that could potentially hinder the Islamic banking institutions and MSME industries in attaining financial inclusion and contributing to sustainable development.

The learning outcomes of this case study are to develop an understanding of informal business practices (IBP) from an economic and a behavioural perspective, identify the pros and cons of IBP and how they can hinder the realization of entrepreneurial aspirations, use the effectuation perspective to understand the entrepreneurial journey of the protagonist and apply the strengths, weaknesses, opportunities and threats (SWOT) analysis and effectuation theory to understand the need for transition from informal to formal business practices.

KSN Iyengar Catering Services (KSNICS) had gained popularity for cooking and serving traditional “Iyengar” cuisine during festivals, ceremonies and other auspicious occasions. With the passage of time, KSNICS slowly diversified into offering food carrier services, corporate catering and preparation of sweets/savouries during the Diwali festival. The enterprise managed to sustain itself without additional investments from external sources. KSNICS was managed in an informal manner by the protagonist, Krishna Kumar. After almost 30 years of KSNICS’s existence, in 2021, Kumar felt that they should diversify into the restaurant business by establishing an authentic “Iyengar” restaurant. In spite of the unpredictable market and the challenging times due to the COVID-19 pandemic, he had somehow managed to sustain his catering business. However, given the informal methods through which he operated his catering services and in the post-COVID-19 pandemic scenario, would it be prudent on his part to establish a restaurant?

This case study is suitable for post-graduate- and executive-level instruction in courses such as managerial skills, entrepreneurship and human resource management. In managerial skills course, it can be used for applying SWOT analysis from a particular perspective for effective decision-making. In entrepreneurship-related courses, it can be used to introduce aspects such as entrepreneurship orientation, effectuation and decision-making. In organizational behaviour and HR-related courses, it can be used to highlight how employees can be trained and motivated and how businesses can be sustained within the scale, especially during challenging times. Irrespective of the course, the IBP discussion would remain a constant point of reference because that was the context under which the current business was operating.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

The purpose of this study is to explore how the personal traits of the informal entrepreneurs influence their formalization decisions.

This study adopted a qualitative approach using a multicase design in which 28 informal entrepreneurs situated in Kampala district, Uganda, were engaged. An interview guide, recorders and note books were used in data collection.

The results indicate that the traits of informal and semiformal entrepreneurs are distinct. Informal entrepreneurs have been noted to be more courageous and resilient, while their semiformal counterparts have greater passion for their businesses. It is thus observed that the formalization prospects are higher for the semiformal entrepreneurs than for their informal counterparts. Entrepreneurs that would be willing to formalize their businesses are discouraged by distance, technology and the cost of involving middlemen. Whereas the resilient entrepreneurs are noted to work through these challenges, the passive ones in both the informal and semiformal categories will not formalize their businesses by giving such excuses.

This study contributes to the extant literature on informal entrepreneurship by providing initial empirical evidence on how the personal traits of the entrepreneurs influence their formalization decisions specifically.

Entrepreneurship policy is a vital component of any entrepreneurial ecosystem. However, the specific policy initiatives that have a greater impact on women's entrepreneurship remain unclear in many developing economies. Therefore, this study aims to evaluate the effectiveness of entrepreneurship policies targeted at women’s entrepreneurship in sub-Saharan Africa (SSA).

Employing fuzzy-set qualitative comparative analysis (fsQCA), this paper utilises and analyses secondary data collected by the World Bank's Women, Business, and the Law (WBL) from 1970 to 2020, encompassing 48 countries within SSA.

Through our analysis, we identified two configurations that sufficiently support women's entrepreneurship. First, a combination of gender-based policies focussing on enabling “access to credit” and “signing of contracts”; and second, a blend of policies supporting “signing of contracts”, “business registration”, and “opening a bank account”, represent significant antecedents to supporting women's entrepreneurship. These distinct pathways are crucial to fostering women’s entrepreneurship in the SSA region.

The study's findings indicate that the impact and effectiveness of entrepreneurship policies targeted at women entrepreneurs in developing economies depend on the effectiveness of other policies that are in place.

This study offers new insights into the intricate interrelationship between entrepreneurship policies and women’s entrepreneurship in developing countries by considering the interdependence and combinative value of gender-based policies that effectively support women’s entrepreneurship in sub-Saharan Africa.

This study aims to determine the impact of forensic accounting, probability of detections, tax penalties, government spending, tax justice and tax ethics on value-added tax (VAT) evasion.

The study uses partial least squares-structural equation modeling to examine the connection between tax sanction, probability of detection, tax ethics, tax justice, forensic accounting and government spending on VAT evasion based on 248 responses collected from the retail industry in Jordan.

The findings also demonstrate that there is a negative correlation between tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting, government spending and VAT evasion efficiency.

The results, considering forensic accounting and government expenditure considerations, may emphasize the importance of the tax sanction, probability of detection, tax ethics, adoption of tax justice in the public sector and tax authority. Additionally, the findings are important for regulators and decision-makers in announcing new laws and strategies for VAT evasion.

It turns out that the tax authority and public sector can definitely improve their capacity to protect public funds and limit VAT evasion practices within SMEs by adopting increased tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting and government spending.

Numerous studies have been conducted at the individual level in the context of income tax on the link between tax punishment, probability of detection, tax ethics, tax justice, forensic accounting and tax evasion. This study expands on the scant evidence of this connection to the retail business in the context of VAT avoidance. Additionally, it advances prior studies by integrating fresh elements, such as forensic accounting and government expenditure, that have never been considered in connection to VAT evasion in the retail sector.

The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities.

The empirical analysis is conducted on a sample of 6,458 Italian municipalities by applying the ordinary least squares (OLS) and instrumental variables (IVs) approaches.

The estimation results show a small increase in marital separations and divorces as the difference between the municipal secondary and primary home tax rate increases. Specifically, an increase of 1‰ in the property tax rate differentials is accompanied by an increase of six marital separations and four divorces per 1,000 inhabitants.

The main limitation of the analysis is that the strategic behavior of the married couple is inferred from econometric analysis with data aggregated at the municipal level. To investigate this phenomenon more precisely, it would be useful to have individual data collected by surveys on strategic divorce decisions due to property tax incentives.

This study contributes to the scant existing literature on the tax incentives for strategic divorce. It is the first study to empirically investigate the effects of property tax on separation and divorce decisions by investigating the Italian context. In Italy, a property tax was introduced in 1993, encouraging “false” divorces by spouses with a second home since the tax on the secondary home was set at a rate higher than that on the primary residence. Moreover, there were no tax deductions and no additional tax breaks on the secondary home, while they were established on the primary one. Higher property taxes and the absence of tax breaks on the secondary home may have encouraged a strategic behavior whereby many married couples filed for false separation and divorce in order to recover part of property tax rebates.

In developing countries, women microentrepreneurs are characterized as being informal, creating a challenge for the sustainability of their businesses. The purpose of this study is to analyze different businesses that adopt this form of operation arguing that formality is unnecessary because they are legitimate businesses (institutional reason). In addition, the role of gender in business management was incorporated, and the consistency of the results was validated in the context of COVID-19.

This study used data from the National Household Survey of Peru for the development of a compared analysis between the period 2018–2019 (pre-COVID-19), made up of a sample of 14,077 observations, and the period 2020–2021 (COVID-19), with 7,922 observations. The unit of analysis was the informal microenterprise with more than three years of operation, and the data was analyzed using a logistic model.

The probability of adopting informality for institutional reasons is more significant in the case of women in contrast to the men when it is a business belonging to the commerce sector and operating in a dwelling with basic services, while this probability decreases if the firm does not have a fixed location. These results are consistent in pre-COVID-19 and COVID-19 periods.

The purpose of this research was to contribute to closing gaps in the generation of evidence that helps to understand the behavior of informal microentrepreneurs in developing countries, allowing a better approach to this problem for the design and implementation of suitable public policies. All this will contribute to the accomplishment of the Sustainable Development Goals.

En países en desarrollo, las mujeres microempresarias se caracterizan por ser informales generando un desafío para la sostenibilidad de sus negocios. La presente investigación analizó diferentes negocios que adoptan esta forma de operación con el argumento de que la formalidad no es necesaria porque son negocios legítimos (motivo institucional); además, se incorporó el rol del género en la gestión del negocio, y se validó la consistencia de los resultados en un contexto de COVID-19.

Se utilizaron datos de la Encuesta Nacional de Hogares de Perú para el desarrollo de un análisis comparado entre el período 2018–2019 (pre-COVID-19), compuesto por una muestra de 14.077 observaciones, y el período 2020–2021 (COVID-19), con 7.922 observaciones. La unidad de análisis es la microempresa informal con más de tres años de operación y los datos son analizados mediante un modelo logístico.

Resulta mayor la probabilidad de adoptar la informalidad por motivos institucionales en el caso de las propietarias en contraste con los propietarios, cuando se trata de un negocio perteneciente al sector comercio y que funciona en una vivienda con servicios básicos, mientras que disminuye esta probabilidad si el negocio no posee un local fijo. Estos resultados son consistentes en tiempos de pre-COVID-19 y COVID-19.

La investigación tiene por fin contribuir al cierre de brechas en la generación de evidencia que ayude a comprender el comportamiento de las mujeres microempresarias informales en países en desarrollo, permitiendo una mayor aproximación a esta problemática para el diseño e implementación de políticas públicas adecuadas. Todo esto contribuirá con los Objetivos de Desarrollo Sostenible.

Nos países em desenvolvimento, as mulheres microempreendedoras caracterizam-se por serem informais, criando um desafio para a sustentabilidade dos seus negócios. A presente investigação analisou diferentes negócios que adotam essa forma de operação com o argumento de que a formalidade não é necessária por serem negócios legítimos (razão institucional); além disso, foi incorporado o papel do gênero na gestão empresarial e se validou a consistência dos resultados num contexto de COVID-19.

Se utilizaram dados da Pesquisa Nacional de Domicílios do Peru para desenvolver uma análise comparativa entre o período 2018–2019 (pré-COVID-19), composto por uma amostra de 14.077 observações, e o período 2020–2021 (COVID-19), com 7.922 observações. A unidade de análise é a microempresa informal com mais de três anos de operação e os dados são analisados através de um modelo logístico.

Resulta maior a probabilidade de adoção da informalidade por motivos institucionais no caso das proprietárias em contraste com os proprietários, quando se trata de um negócio pertencente ao setor do comércio e que funciona numa casa com serviços básicos, enquanto esta probabilidade diminui se o negócio não tem local fixo. Estes resultados são consistentes em tempos pré-COVID-19 e COVID-19.

A pesquisa tem como objetivo contribuir no fechamento de brechas na geração de evidências que ajude a compreender o comportamento dos microempreendedores informais nos países em desenvolvimento, permitindo uma melhor abordagem desta problemática para o desenho e implementação de políticas públicas adequadas. Tudo isto contribuirá para o cumprimento dos Objetivos de Desenvolvimento Sustentável.