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Exploring the Demand-Side of the Informal Economy during the COVID-19 Restrictions: Lessons from Iași, Romania

Ioana Alexandra Horodnic (), Colin Williams (), Oana Țugulea () and Iuliana Claudia Stoian Bobâlcă ()
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Ioana Alexandra Horodnic: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iași, 700505 Iași, Romania
Oana Țugulea: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iași, 700505 Iași, Romania
Iuliana Claudia Stoian Bobâlcă: Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iași, 700505 Iași, Romania

Sustainability, 2022, vol. 14, issue 12, 1-16

Abstract: Little attention has been paid to why consumers choose to purchase goods and services from the informal economy. Similarly, few studies have been conducted on consumer behaviour in relation to informal markets during the COVID-19 pandemic. The aim of the article is to evaluate, for the first time, whether the COVID-19 pandemic influenced consumer behaviour in relation to the informal economy. Qualitative evidence collected in Iași, Romania, is reported. The finding is that the most important motives for purchasing goods and services from the informal economy are related to social ends, such as supporting local businesses, maintaining relationships with others, and enhancing sustainable development. The novel finding of this research is that community exchange in the form of mutual aid and reciprocity is not activated only for friends, neighbours, kin or work colleagues but also for local businesses facing financial difficulties. The customers are displaying solidarity and empathy for their situation. As such, this article adds to previous findings indicating that the motivation of lower cost is not the universal rationale for purchasing from the informal economy as many consumers choose to make purchases from informal market driven by social rationales. The paper ends by discussing the policy implications of the findings.

Keywords: supplier-buyer relationship; informal economy; rational economic actor; social actor; institutional theory; COVID-19; market sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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