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1 – 10 of over 9000Bojan Dobovšek and Boštjan Slak
The purpose of this paper is to demonstrate the importance of studying the quasi-legal forms of informal economic behaviour that we know as the white informal economy. The paper…
Abstract
Purpose
The purpose of this paper is to demonstrate the importance of studying the quasi-legal forms of informal economic behaviour that we know as the white informal economy. The paper also sheds light on the role of the informal economy in the financial crisis that started in 2008. Finally, the aim of the paper is also to encourage empirical research about these concepts.
Design/methodology/approach
The paper is theoretical and based on a literature review.
Findings
The paper implies that when discussing about informal economy, different sub-categories should continue to be used in order to distinguish the various forms of informal economic practices. There is a particular need for research on practices of economic activities that are legal but not always moral, yet severely damaging. For such activities, the authors propose the term/categorisation the “white informal economy”. Additionally, the authors argue that in the causal links of events that brought about the financial crisis the role of the white informal economy was significant.
Practical implications
The paper wishes to encourage further research on the topic of (white) informal economy that in turn would also create the scenario for proper policy development for tackling tax avoidance, tax evasion and future financial crises.
Originality/value
The paper adds to scholarship that takes a critical standpoint towards the financial crisis and to scholarship on the informal economy. It presents an attempt to stimulate further discussion about the connectivity of the informal economy and the financial crisis.
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The purpose of this paper is to contribute original evidence about the conditions for formal and informal contracts for commodities and labour in the waste economy of a South…
Abstract
Purpose
The purpose of this paper is to contribute original evidence about the conditions for formal and informal contracts for commodities and labour in the waste economy of a South Indian town.
Design/methodology/approach
Field research was exploratory, based on snowball sampling and urban traversing. The analysis follows capital and labour in the sub-circuits of capital generating waste in production, distribution, consumption, the production of labour and the reproduction of society.
Findings
Regardless of legal regulation, which is selectively enforced, formal contracts are limited to active inspection regimes; direct transactions with or within the state; and long-distance transactions. Formal labour contracts are least incomplete for state employment, and for relatively scarce skilled labour in the private sector.
Research limitations/implications
The research design does not permit quantified generalisations.
Practical implications
Waste management technology evaluations neglect the social costs of displacing a large informal labour force.
Social implications
While slowly dissolving occupational barriers of untouchability, the waste economy is a low-status labour absorber of last resort, exit from which is extremely difficult.
Originality/value
The first systematic exploration of formal and informal contracts in an Indian small-town waste economy.
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Rouhin Deb, Harsh Vardhan Samalia and Santosh Kumar Prusty
Competitive pressure from informal firms has always been a threat to the formal enterprises. However, the strategic choices a firm makes to deal with such competitive pressures…
Abstract
Purpose
Competitive pressure from informal firms has always been a threat to the formal enterprises. However, the strategic choices a firm makes to deal with such competitive pressures still remain under-explored. The purpose of this paper is to examine the influence of informal competitive pressures in driving export propensity of formal firms.
Design/methodology/approach
The paper is based on a standard error logistic model, and the model takes into account the contingent relationships along with the primary relationship. The authors draw the sample of 9,812 manufacturing firms spanning across the Indian sub-continent from the World Bank enterprise survey conducted in the year 2014.
Findings
The empirical results indicated that the level of competition from informal firms is positively associated with the propensity to export. The primary relationship is also affected by various contingent factors such as regulatory obstacles, bribery and new product development.
Research limitations/implications
Although the World Bank enterprise survey data provide a broad coverage, the study warranted few proxy measures in order to operationalize formal competition as it was not captured directly in the concerned data set.
Practical implications
The analysis demonstrates that informal competition has direct effect on the firm’s propensity to export. The findings indicate that export is an attractive action alternative for firms facing informal completion in an emerging economy. The results further indicate that this effect strengthens as institutional factors such as regulatory obstacles and bribery increase.
Social implications
The paper is an attempt to alter the prevailing negative view on informality. The findings indicate that informal competition spurs competitiveness in the formal sector indicating its positive role in the economic growth of the nation.
Originality/value
The paper takes cue from attention-based view of the firm and the institutional escapism logic to affirm the role of informal competition and various contingent institutional and strategic factors in driving export propensity.
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Colin C. Williams, Ioana Alexandra Horodnic and Jan Windebank
Participation in the informal economy has been predominantly explained from a supply side perspective by evaluating the rationales for people working in this sphere. Recognising…
Abstract
Purpose
Participation in the informal economy has been predominantly explained from a supply side perspective by evaluating the rationales for people working in this sphere. Recognising that many transactions in the informal economy are often instigated by customers, exemplified by purchasers asking “how much for cash?”, the purpose of this paper is to explain the informal economy from a demand-side perspective by evaluating citizens’ rationales for making purchases in the informal economy. Here, the authors test three potential explanations for acquiring goods and services in the informal economy, grounded in rational economic actor, social actor and formal economy imperfections theoretical perspectives.
Design/methodology/approach
To do this, a 2013 Eurobarometer survey, involving 27,563 face-to-face interviews conducted in 28 European Union member states is reported.
Findings
The finding is that all three rationales apply but the weight given to each varies across populations. A multinomial logit regression analysis then pinpoints the specific groups variously using the informal economy to obtain a lower price, for social or redistributive rationales, or due to the failures of the formal economy in terms of the availability, speed and quality of provision.
Practical implications
The outcome is to reveal that the conventional policy approach of changing the cost/benefit ratios confronting purchasers will only be effective for those purchasers citing a lower price as their prime rationale. Different policy measures will be required for those making informal economy purchases due to the shortcomings of the formal economy, and for social ends. These policy measures are then discussed.
Originality/value
The value and originality of this paper is that it explains participation in the informal economy from a purchaser, rather than the predominant supplier, perspective.
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Michael Rogan, Sally Roever, Martha Alter Chen and Françoise Carré
In this chapter, we aim to illustrate some of the forms taken by informal employment in the global south and how these can best be understood by adopting a wider analytical lens…
Abstract
In this chapter, we aim to illustrate some of the forms taken by informal employment in the global south and how these can best be understood by adopting a wider analytical lens than has been applied in much of the precarious employment literature. We draw on the findings of a recent study of the working conditions of urban informal workers from 10 cities in the global south. The study consisted of focus groups (15 in each city) conducted through the framework of a participatory informal economy appraisal as well as a survey of 1,957 home-based workers, street vendors, and waste pickers. Our findings illustrate a number of ways in which these three groups of informal workers are embedded within the formal economy. While they are not engaged in wage employment, they play subordinate roles to both formal sector firms within global production networks and unequal production relations and to the state through, inter alia, constrained access to public spaces and regulation. In order to interpret these findings, we apply Agarwala’s (2009) “relational” lens to demonstrate how risks and costs are transferred to workers who constitute the “real economy” in much of the global south. Given the often disguised connections between informal employment and the formal economy, this approach also provides a bridge to understanding precarious working conditions and the effects of globalization outside of the industrialized north.
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An early morning at Bryant Salvage, a Vietnamese recycling business, finds a variety of San Francisco's scavengers converging to sell their findings. Vehicle after vehicle enters…
Abstract
An early morning at Bryant Salvage, a Vietnamese recycling business, finds a variety of San Francisco's scavengers converging to sell their findings. Vehicle after vehicle enters the yard to be weighed on the huge floor scale before dumping its load in the back; ancient pick‐up trucks with wooden walls, carefully loaded laundry carts, canary Cadillacs stuffed to overflow with computer paper, the shopping carts of homeless men, a 1950s ambulance carrying newspaper, and even the occasional gleaming new truck. The homeless men unload their towers of bottles and cardboard while young Latino van recyclers shout jokes across them. Middle aged Vietnamese women in jeans and padded jackets buzz around on forklifts or push around great tubs full of bottles and cans, stopping occasionally to help elderly people with their laundry carts. The van recyclers repeatedly honk their horns at the homeless guys to get out of the way. The homeless recyclers, silently methodical in their work, rarely respond.
Isa Mustafa, Justina Pula-Shiroka, Besnik A. Krasniqi, Veland Ramadani and Liridon Kryeziu
Informal entrepreneurship challenges sustainable economic performance and is a barrier to productive entrepreneurship. In this context, the level of development of formal and…
Abstract
Informal entrepreneurship challenges sustainable economic performance and is a barrier to productive entrepreneurship. In this context, the level of development of formal and informal institutions and their impact on informal entrepreneurship is crucial. This chapter examines the informal sector entrepreneurship in Kosovo using institutional theory lenses. Using a survey with 500 owners/managers of private companies, the study finds that the service industry has the highest participation in the informal economy compared to other sectors. On average small firms, compared to larger ones, report a higher percentage of unreported incomes. Our findings also suggest that when informal entrepreneurs perceive penalties for tax avoidance from tax authorities as high, they tend to have higher compliance with reporting their income. In addition, our findings indicate that the higher the vertical (trust in formal institutions) and horizontal distrust (trust in business partners), the higher the involvement in the informal economy. The chapter concludes with some policy implications for tackling the informal economy in Kosovo and similar institutional contexts.
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John C. Cross and Bruce D. Johnson
Attempts to theorize the relationship between the informal and the illegal sectors of the economy. States that there are significant behavioural similarities. Proposes an emergent…
Abstract
Attempts to theorize the relationship between the informal and the illegal sectors of the economy. States that there are significant behavioural similarities. Proposes an emergent paradigm based on dual labour market theory to explain the similarites and differences in order to guide future research in each area. Applies the theory to the production and marketing of crack cocaine and shows how the model helps us to understand issues of exploitation and risk makagement within the drug market.
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The purpose of this paper os to reveal the complex characteristics of informal employment and the difficulties of implementing policies to counteract this phenomenon.
Abstract
Purpose
The purpose of this paper os to reveal the complex characteristics of informal employment and the difficulties of implementing policies to counteract this phenomenon.
Design/methodology/approach
Sections 1 and 2 review different theories on the causes and effects of informal employment, drawn from the international literature on the subject. Sections 3 and 4 present the results of field research conducted in Southern Italy with the intent of exploring the nature of informal employment. Section 5 illustrates and analyzes some cases of regularization processes drawn from further field research conducted in Southern Italy.
Findings
This paper reveals that the key factor to facilitate successful regularization is not only the willingness of entrepreneurs and/or workers to abide by the law but also other important variables such as entrepreneurial skills, the presence of welfare programmes and the business environment within which business activities take place. The main conclusion of this paper is that informal employment is often the result of a complex interaction of economic, psychological and social factors.
Practical implications
The practical implications of this conclusion are that, in order to successfully tackle informal employment, regularization policies have to be “tailored” to the specific context of their implementation.
Originality/value
This paper evaluates the wider applicability of the regularization policies used in Italy to harness informal employment.
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