Effects of Informal Institutions on the Performance of Microenterprises in the Philippines: The Mediating Role of Entrepreneurial Orientation

The study investigates the effects of informal institutions and entrepreneurial orientation on the performance of microenterprises at the subnational level within a developing country context. Using structural equation modeling based on a large-scale survey of 735 microenterprises in the Philippines, it is found that informal institutional factors and entrepreneurial orientation are associated with firm performance. However, further analysis reveals a strong mediating role of entrepreneurial orientation on the informal institutions-firm performance relationships. This finding is novel and adds to our understanding of the mechanism through which informal institutions affect firm performance, particularly for microenterprises in developing countries.     

Modes of production in home maintenance: accounting for the choice between formality,off the books and self‐provisioning

Households depend on the existence of a home, and therefore, maintenance plays an important social and economic role. Formal outsourcing is often overestimated here and alternative modes, such as informal outsourcing and do‐it‐yourself (DIY), are overlooked. This paper estimates and accounts for the choice of one mode of production in Flemish households. First, the different modes of production are quantified according to two different methods. Further, an explanation of the choice made is constructed. The complexity of maintenance work has an impact as well as the dimensions of social and cultural capital. Factors such as dexterity, occupational acquaintance with maintenance work, social trust and social contacts play a role. Finally, a model of a sequence of decisions is tested. This ramification mechanism shows that the primary choice is formal commissioning or not, inspired by technical complexity. The second choice between off‐the‐books outsourcing and DIY is influenced by the capital resources of the households.     

The use of NDAs in the IT service sector

Business people are advised to use contracts for the protection of their assets when entering business transactions with other strategic partners. Non-disclosure agreements (NDAs) are examples of such contracts that limit what those with access to certain knowledge can do with the privileged information. However, knowledge is constantly changing as soon as someone gains knowledge and adds personal knowledge to that knowledge. As such, the NDA may be redundant soon after it is signed. IT service professionals realize the boundless nature of knowledge and regularly work with professional colleagues to provide technical services to their customers. I provide a qualitative analysis of interviews with four IT service professionals on their use of NDAs in formal business transactions and in informal consultative sessions. I find positive attitudes toward the use of NDAs in formal business transactions such as in strategic partnerships but limited use of NDAs in informal consultative sessions.     

Resources,home institutional context and SMEs’ exporting: Direct relationships and contingency effects

Research highlights the role of resources in SMEs’ exporting but is less forthcoming with respect to entrepreneurial perceptions of home institutional quality. Drawing on institution-based lenses, we distinguish among formal, informal, and regulatory institutions, which in concert with firm resources are expected to influence SMEs’ export behavior. Our predictions are tested on a sample of 150 firms located in Greece. The analysis of direct relationships shows that formal and informal institutional dimensions affect significantly, but differently, SMEs’ export activity. The analysis of interaction effects demonstrates that resource decisions for exporting are contingent upon entrepreneurial perceptions of the home institutional context, such that SMEs respond to formal and informal domestic institutional weaknesses by intensifying resource allocations to fuel export sales. In an opposite direction, export regulatory complexity reverses the positive resources-exporting link. These findings suggest the importance of home institutions in the exporting field.     

Does religion influence location choice in the hotel industry?

Relying on data from the Spanish hotel industry, this paper analyzes the role of informal institutional factors (IIF) in location choice. Earlier studies mostly use an aggregate level of cultural differences as informal institutional factors. We, however, go deeper into this concept and study the impact of two distinct but interrelated informal institutional factors, religion and language, on the location decisions of hotel chains. We resolve the overlapping problem between these two highly correlated IIF by means of a ‘layer’ measurement in Confirmatory Factor Analysis. Our results show that the higher the informal institutional differences (IID), the lower the presence of the hotels in the foreign country. While physical distance plays a key moderating role, formal institutional differences (FID) did not show any effect. We contribute by unravelling the role of language and religion in location choice in the internationalization process of service firms. Moreover, we test the moderating role of formal institutions in these decisions, thus combining the impact of formal and informal institutions on location choices in service firms.     

Determinants of Russia's Informal Economy: The Impact of Corruption and Multinational Firms

Based on the electricity consumption approach, this study examined empirically (among other determinants) the impact of corruption and multinational firms (MNEs) on the relative size of the informal economy in Russia's regions in 1995–2012. Strong evidence is provided of the positive effect of corruption on the informal regional economies. The significant role of MNEs and regulation in curbing informal activities is revealed. A larger informal economic sector is observed in regions with a higher number of local firms and unemployment. An integrated strategy of dealing with corruption and informal businesses is suggested to be more effective in reducing informal practices.     

International perspectives on the supply of informal venture capital

Despite major changes in the number and range of sources of finance for new and small ventures in the United Kingdom in recent years, there continues to be a shortage of risk capital for ventures actively seeking external equity finance. In the United States the informal venture capital market plays a major role in filling this equity gap, particularly in the early stages of venture development.However, there is little comparable information on the size of the informal venture capital pool in the United Kingdom or other European economies, despite recent recognition that the apparent underdevelopment of this market in the U.K. represents a major barrier to the development and growth of new ventures. This paper, therefore, presents the first analysis of the informal venture capital market in the U.K. and compares the characteristics and attitudes of U.K. informal investors with those in the U.S.The data reported in this paper have been obtained from a combination of postal survey and snowball sample techniques that generated useable information from 86 informal investors. Informal investors are playing an important role in venture financing in the U.K. in three ways: they make small scale investments in new and early stage ventures, where the equity gap is most significant; they are more permissive in their financing decisions than the formal venture capital industry in terms of having lower rejection rates, longer exit horizons, and lower target rates of return; and they invest locally and can thereby close the regional equity gap arising from the overconcentration of venture capital investment in the core South-East region in the U.K.In terms of demographics, U.K. informal investors share many of the characteristics of North American informal investors: they are predominantly male, with an entrepreneurial background, financially well-off without being super-rich, and identify investment opportunities from friends and business associates. There are a number of key differences, that may be attributable to differences in contextual factors such as personal tax regimes, regulatory environments, wealth distribution, and the structure of the formal venture capital and IPO markets. For example, U.K. informal investors are significantly older than those in the U.S. reflecting the influence of higher U.K. tax rates on the rate of capital and wealth accumulation.More generally, in comparison to U.S. investors, U.K. informal investors: have more investment opportunities brought to their attention; seriously consider more proposals but invest in no more opportunities; operate independently with syndication and joint investment relatively uncommon, reducing the average total investment per financing round available to ventures; fail to identify entrepreneurs themselves as a primary source of information on investment opportunities; have higher rate of return and capital gains expectations; are slightly less patient investors; and are rather less satisfied with the overall performance of their informal investment portfolios, reflecting intercountry and intertemporal variations in investment climate and conditions. It appears, therefore, that the general inefficiency of the informal capital market identified by Wetzel (1987) (which reflects the invisibility of informal investors, the fragmented nature of the market, and the imperfect channels of communication between investor and entrepreneur) is compounded in the U.K. case. The extent to which this reflects contextual differences on the one hand or simply a slower developmental process in the U.K. will only be common methodological basis. Based on the evidence presented in this paper, however, a key conclusion is that the information networks available to U.K. informal investors are less effective than those in North America, and in particular appear to contain lower quality information and a higher degree of redundant information. Specific forms of intervention in the market by, for example, stimulating the flow of information through the promotion of informal investment networking and brokerage services along the lines of U.S. and Canadian examples such as VCN and COIN therefore appear defensible.     

How entrepreneurship ecosystem influences the development of frugal innovation and informal entrepreneurship

This article critically analyses how the entrepreneurial ecosystem and institutional environment influences the development of frugal innovation and informal entrepreneurship. There is a dearth of empirical research on African entrepreneurship ecosystems and complementors that produce innovations in the informal sector. We address this gap, by examining why and how informal businesses operate and evolve. Based on a qualitative approach, interviewing 20 business owners in Nigeria, two focus groups meeting with 5 and 7 business associations leaders, respectively, we examine the role of institutional environments, how entrepreneurs operate and overcome the barriers to entrepreneurship. The results reveal a model of determinants of frugal innovation and informal entrepreneurship ecosystem comprising formal/informal rules, access to market, and family as important elements that act as a means to effective knowledge flows, networking, capital, and resources sharing.     

Social Technologies,Informal Knowledge Practices,and the Enterprise

This article focuses on the ways in which social technologies facilitate informal knowledge sharing in the workplace. Social technologies include both common technologies such as email, phone, and instant messenger and emerging social networking technologies, often known as social media or Web 2.0, such as blogs, wikis, public social networking sites (i.e., Facebook, Twitter, and LinkedIn), enterprise social networking technologies, etc. We know social technologies support informal interactions over digital systems and influence informal social connections among people within and across organizational boundaries. To understand the role of social technologies in informal knowledge practices, we pursue a field study of knowledge workers in consulting firms to investigate the role of social technologies in their informal knowledge sharing practices. Our theorizing from the data is guided by the conceptual premises of sociomateriality to better understand the ways social technologies are integrated with common knowledge practices. Findings highlight five knowledge practices supported by the use of social technologies. Building from these findings we offer conceptual insights regarding the material performance of different social technologies as an assemblage.     

The historical shifts of in/formality of learning within craft skills ecosystems in the United Kingdom

In this paper, we address the debate on local skills ecosystems and informal learning. We use the social ecosystem model as a tool to help us analyse the role played by various actors in learning and skills ecosystems and highlight the role of informal learning in vocational education and training. We draw on the case of craft pottery to discuss the historical shifts and transformations of ecosystems, including the centrality of informal learning occurring in different spaces and times, and subsequent transformation of the learning ecosystem. Our paper contributes in two ways. First, we add the lens of temporality to understanding of how learning and skills ecosystems are maintained and developed, in the absence of supportive government policy. Second, we show how multiple horizontal sectors contribute to reconstruct a learning and skills ecosystem, as an informal one, over time.     

The Development of Female Global Managers: The Role of Mentoring and Networking

This paper explores the role of mentoring and networking in the career development of global female managers. The paper is based on data collected from interviews with 50 senior female managers. The voices of the female managers illustrate some of the difficulties associated with informal organisational processes, in particular mentoring and networking, which hinder their career development. The findings confirm that female managers can miss out on global appointments because they lack mentors, role models, sponsorship, or access to appropriate networks – all of which are commonly available to their male counterparts. The interviewees suggest that men, as the dominant group, may want to maintain their dominance by excluding women from the informal interactions of mentoring and networking. The findings further suggest that if females had more access to networks and mentors they could be socialised in both the formal and informal norms of the organisation and gain career advantages from these. The managers reveal that they encounter additional barriers in ‹a man’s world’ and remind us that there is still much to be changed.     

Institutional Barriers to Small- and Medium-Sized Enterprise Operations in Transition Countries

Building on institutional theory and on existing literature regarding barriers to private businesses in transition countries, this paper examines the inter-related effect of nineteen factors grouped into four types of barriers (formal, informal, environmental and skills) on existing small- and medium-sized enterprise operations in Lithuania. Regression analyses on a sample of 332 business owners indicate that perceived formal barriers are associated with perceived informal barriers such as corruption and perceived environmental barriers are associated with perceived skill barriers such as management problems. The transition effect based on business start-up date was not found to play a significant role.     

城市中年人非正式养老准备问题初探——对南京市白下区的调查

学术界对"中年人"群体的养老研究相对薄弱。提出了"非正式养老准备"的概念。通过对南京市白下区的抽样调查,从个人、家庭与制度等方面探讨了城市中年人非正式养老准备的状况。结果表明:非正式养老准备普遍缺乏;非正式养老准备在各群体间呈现多样化;城市中年人非正式养老准备的途径单一。     

India's Informal Trade with Bangladesh: A Qualitative Assessment

The large and vibrant informal trade between India, and Bangladesh continues to thrive despite unilateral/regional/multilateral trade liberalisation in these two countries. This calls for an in-depth analysis of India's informal trade with Bangladesh. Using insights from the New Institutional Economics informal and formal institutions engaged in cross-border trade are contrasted to examine whether informal trading arrangements provide better institutional solutions. The analysis, carried out on the basis of an extensive survey conducted in India and Bangladesh reveals that informal traders in India and Bangladesh have developed efficient mechanisms for contract enforcement, information flows, risk sharing and risk mitigation. Further, informal traders prefer to trade through the informal channel because the transaction costs of trading in the informal channel are significantly lower than the formal channel implying that informal trade takes place due to the inefficient institutional set up in the formal channel. The principal policy implication from the study is that unless the transacting environment of formal traders improves, informal trade will continue to coexist with formal trade, even if free trade is established in the SAARC region.     

The international market selection of Chinese SMEs: How institutional influence overrides psychic distance

The purpose of this research is to contribute to the ongoing debate about whether psychic distance still plays a vital role in the internationalisation of SMEs from emerging markets. Drawing on the prior research which suggests the salient impact of institutional factors on internationalisation, we investigate the role of home country institutions in international market selection. Adopting a multi-case methodology, we collected semi-structured interview data from six small and medium-sized manufacturing firms in China. Our findings suggest that while psychic distance is still important in some circumstances, both formal institutions, such as government support, and informal institutions, such as business and political guanxi, enable Chinese SMEs to choose psychically distant markets. Our findings also indicate that informal institutions interact with formal institutions to further influence SMEs’ international market selection. This research contributes to SME internationalisation studies by revealing how formal and informal institutional factors override psychic distance in influencing international market selection.     

非正式投资影响因素研究：基于浙江创业观察的实证分析

虽然非正式资本是创业企业早期阶段重要的融资来源,但是并不清楚像中国这样的转型经济国家中个体非正式投资倾向的影响因素。文章利用浙江创业观察（2016）调查数据,从个体创业特质和创业活动参与两个方面,分析个体是否进行非正式投资以及他们的非正式投资去向的影响因素。研究结果表明,认识企业家和商业机会感知是影响个体非正式投资倾向两个最重要的因素,创业活动参与的不同类型对于个体的非正式投资倾向存在替代或者互补效应。文章最后对于发展非正式资本提出相应的对策建议。     

简析我国农村正规金融与农村经济增长之间的关系

目前,我国农村正规金融与农村经济增长之闻并不存在长期稳定的均衡关系,我国农村正规金融的发展远远没有满足农村经济增长的需要.但由于没有考虑非正规金融因素.此结论并不一定表明金融发展理论对我国农村经济增长的不适用性,相反从侧面说明了我国农村非正规金融的积极作用,而这是今后农村金融改革应该注意的方向.     

Informal firms in developing countries: entrepreneurial stepping stone or consolation prize?

The potential dynamic benefits of a firm having the option to adopt informal status are analysed. Informality may be a stepping stone, without which formality may never be achieved. This result is obtained for a broad range of realistic parameter values, suggesting a potential dynamic case for government support of informal firms. Informality may alternatively play a converse role as a consolation prize, with a firm only entering an industry (formally) because it recognizes that if profitability is disappointing, it can switch to informality. However, this result is obtained for a range of parameter values so narrow as to be of no practical significance.     

Micro-Entrepreneurship in Niger: Factors Affecting the Success of Women Street Food Vendors

Micro-entrepreneurship in the informal sector plays a vital role in generating employment and income in West Africa. In this article, the authors examine business success factors for micro-entrepreneurs involved in the production and sale of street foods in Niger, drawing on the resource-based view theory. Business success was measured by size of firm and vendor's perception of enterprise growth. Their results indicate that business experience is an important success factor, while the need for cash is a constraint for business success. A rare resource, limited access to financial assets translates into limited opportunities for growth of these informal micro-enterprises into viable businesses.