Political Turmoil and Informal Entrepreneurship: Uncovering Drivers of Resilience in Developing Countries

Rismaida Kusuma Dewi and Annisa Qurrota A'yun
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Rismaida Kusuma Dewi: Management Department, Vocational School, Universitas Diponegoro, Semarang, Indonesia
Annisa Qurrota A'yun: Management Department, Vocational School, Universitas Diponegoro, Semarang, Indonesia

Journal Economic Business Innovation, 2025, vol. 2, issue 1, 47-61

Abstract: Purpose: This paper provides evidence on how external institutional contexts and internal cognitive dimensions are associated with the engagement in informal entrepreneurship in emerging markets. Method: Methods A quantitative study was used in this study with structured questionnaires and analysis using SPSS to 438 subjects in Indonesia. Findings: The severity of political contestation level, decomposition of formal economy access, poor institutional governance and community social capital increase informal entrepreneurship. Additionally, a resilience-based entrepreneurial mindset (REM) has a significant moderating and enhancing effect on the relationships. Novelty: The research adds to the literature on entrepreneurship by offering REM as a new cognitive moderator that serves to neutralise institutional adversity and stimulate entrepreneurial engagement, dovetailing institutional theory and entrepreneurial cognition. Implications: The study contributes to theory development by highlighting psychological resilience in institutional void environments, while providing practitio- ners with guidance to facilitate adaptive entrepreneurship in vulnerable domains. More broadly, it offers a portable framework for interpreting the informal entrepreneurial ecosystem in a context of uncertainty and institutional frailty.

Keywords: Informal entrepreneurship; Resilience; Institutions; Conflic; Economic merger (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ebi:journl:v:2:y:2025:i:1:p:47-61

DOI: 10.69725/jebi.v2i1.220

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