Opportunity amidst explosions: How armed conflicts spark informal entrepreneurship in emerging economies

Esther Salvi, Diana M. Hechavarria and Daniela Gimenez-Jimenez

Journal of Business Venturing Insights, 2025, vol. 23, issue C

Abstract: Armed conflicts, such as a surge in bombings, shelling, and other violent outbreaks, dramatically affect national economies and business activities. This article aims to merge the previously separate research streams on foreign direct investment (FDI) and informal entrepreneurship, illustrating how these elements interact within the context of armed conflict. Utilizing data from eight emerging economies over 16 years, we construct a two-step mediation model to demonstrate that increased armed conflict reduces FDI, enabling informal entrepreneurship. Our study offers two important insights: First, it introduces a novel perspective on armed conflict as an external enabler of informal entrepreneurship. Second, it uncovers three pivotal mechanisms—legitimation, demand substitution, and resource access—through which the decline in FDI resulting from armed conflict intensification stimulates informal entrepreneurial activity. The findings of this study contribute not only to academic discourse at the intersection of international business and entrepreneurship, but also provide practical insights that are essential for shaping policies, guiding international business strategies, and fostering economic resilience in regions affected by violence and instability.

Keywords: Armed conflict; FDI; Informal entrepreneurship; Emerging economies; External enablers (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2352673425000010
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:23:y:2025:i:c:s2352673425000010

DOI: 10.1016/j.jbvi.2025.e00514

Access Statistics for this article

Journal of Business Venturing Insights is currently edited by Dimo Dimov

More articles in Journal of Business Venturing Insights from Elsevier
Bibliographic data for series maintained by Catherine Liu ().