Title: The effect of institutional asymmetry on informal entrepreneurship

Authors: Gianluca Zanella; Cory R.A. Hallam; Teja Guda

Addresses: Department of Information Systems and Cybersecurity, Alvarez College of Business, The University of Texas at San Antonio (UTSA), One UTSA Circle, San Antonio, TX, 78249, USA ' Texas Biomedical Research Institute, 8715 Military Dr. W, San Antonio, TX 78227, USA ' Department of Biomedical Engineering and Chemical Engineering, Klesse College of Engineering and Integrated Design, University of Texas at San Antonio (UTSA), One UTSA Circle, San Antonio, TX 78249, USA

Abstract: Scientific literature represents the informal economy in two opposite ways, either as a sector characterised by low wages and productivity, and as a provider of livelihood for billions of people around the world. Macroeconomic theories and studies provide contrasting explanations of this complex phenomenon. Using institutional theory, we develop a microeconomic approach from an individual perspective to understand the social dynamics that can explain the choice of informal entrepreneurship. Drawing from a rich tradition of cognitive models and institutional theories, this study provides evidence of the differential effect of institutional asymmetry on nascent entrepreneurs through attitudes and subjective norms. Social pressure exerts a critical role in differentiating the entrepreneurial process between formal and informal nascent entrepreneurs. The theoretical and practical implications are discussed.

Keywords: informal entrepreneurship; Bolivia; institutional asymmetry; social pressure; emerging economies; pervasive informal economy.

DOI: 10.1504/IJESB.2024.142443

International Journal of Entrepreneurship and Small Business, 2024 Vol.53 No.4, pp.472 - 502

Accepted: 16 Oct 2022
Published online: 31 Oct 2024 *

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