Entrepreneurship in the informal economy: Commercial or social entrepreneurs?

  • Williams C
  • Nadin S
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Recent research has revealed that a large proportion of entrepreneurs
start-up their ventures operating on a wholly or partially off-the-books
basis. Until now, it has been commonly assumed that those who operate in
the informal economy are exclusively commercial entrepreneurs. They are
assumed to be rational economic actors who weigh up the benefits of
operating off-the-books against the costs of being caught and decide to
operate in this manner. The aim of this paper is to evaluate critically
this a priori assumption. Reporting evidence from a 2005/6 survey
involving face-to-face interviews with 102 informal entrepreneurs in
Moscow in Russia, the finding is that such entrepreneurs are not purely
commercially driven. Examining their rationales, informal entrepreneurs
are found to range from purely rational economic actors pursuing
for-profit logics through to purely social entrepreneurs pursuing purely
social logics, with the majority somewhere in-between combining both
for-profit and social rationales. Neither do their logics remain static
over time. What begins as a commercial entrepreneurial venture may
become more socially oriented over time or vice versa. So too do their
logics vary socio-spatially. Those living in deprived populations are
more socially-orientated, whilst those in relatively affluent
populations are comparatively more profit-driven. The outcome is a call
for a more nuanced explanation of the complex and heterogeneous logics
of informal entrepreneurs.

Author-supplied keywords

  • Commercial entrepreneurship
  • Enterprise culture
  • Informal sector
  • Moscow
  • Social entrepreneurship

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