RT Article
T1 Competing Against the Unknown: The Impact of Enabling and Constraining Institutions on the Informal Economy
JF Journal of business ethics
VO 127
IS 2
SP 251
OP 264
A1 Mathias, B. D.
A1 Lux, Sean
A1 Russell Crook, T.
A1 Autry, Chad
A1 Zaretzki, Russell
LA English
PB Springer Science + Business Media B. V
YR 2015
UL https://www.ixtheo.de/Record/1785653393
AB In addition to facing the known competitors in the formal economy, entrepreneurs must also be concerned with rivalry emanating from the informal economy. The informal economy is characterized by actions outside the normal scope of commerce, such as unsanctioned payments and gift-giving, as means of influencing competition. Scholars and policy makers alike have an interest in mitigating the impacts of such informal activity in that it might present an obstacle for legitimate commerce. Received theory suggests that country institutions can enable and constrain productive activity, and, in doing so, influence competitive obstacles in a country. Leveraging 13,670 responses from entrepreneurs distributed across 59 countries, we provide evidence that two particular types of enabling institutions, countries’ property rights regulations and cooperative actions, are useful for lowering the obstacles presented by informal activity. We also find evidence that two constraining institutions, economic and financial regulations lead to more obstacles presented by informal activity. We describe implications for entrepreneurs, policy makers, and future researchers stemming from these findings.
K1 Informal activity
K1 Institutional Theory
DO 10.1007/s10551-013-2030-6