Multi-dimensional informality and heterogeneity of microenterprises in urban Africa

Nobuaki Hamaguchi (), Hiroyuki Hino, Charles Piot and Jiahan Yin
Additional contact information
Nobuaki Hamaguchi: Kobe University
Hiroyuki Hino: Duke University
Charles Piot: Duke University
Jiahan Yin: University of Illinois Urbana-Champaign

The Japanese Economic Review, 2025, vol. 76, issue 4, No 6, 925 pages

Abstract: Abstract Drawing on a multidimensional framework, we develop the Composite Informality Index (CII) as a scalar measure capturing the degree of firm informality. CII outperforms both individual aspects of informality and binary formal–informal classifications in associating informality with firm performance. Our findings show that a positive entrepreneurial mindset is associated with more formal practices, while firms relying less on government tend to be more informal. Firm employment size is negatively correlated with CII. The relationship between CII and sales growth is inconclusive, while technology adoption and business partnerships play a more decisive role in driving growth. During the COVID-19 shock period, more informal firms demonstrated stronger sales performance. However, this advantage did not persist into the recovery phase, as the link between informality and post-shock sales growth was not statistically significant. Hence, higher informality does not necessarily confer greater resilience.

Keywords: Multiple correspondence analysis; Degree of informality; Size; Growth; Resiliency (search for similar items in EconPapers)
JEL-codes: O17 O55 Z13 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s42973-025-00212-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:jecrev:v:76:y:2025:i:4:d:10.1007_s42973-025-00212-w

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/42973

DOI: 10.1007/s42973-025-00212-w

Access Statistics for this article

The Japanese Economic Review is currently edited by Michihiro Kandori

More articles in The Japanese Economic Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().