EXPLAINING INFORMAL SECTOR ENTREPRENEURSHIP IN KOSOVO: AN INSTITUTIONALIST PERSPECTIVE

Colin Williams and Besnik Krasniqi ()
Additional contact information
Besnik Krasniqi: Faculty of Economics, University of Prishtina, “Hasan Prishtina,” Agim Ramadani St., Prishtina 10000, Kosovo

Journal of Developmental Entrepreneurship (JDE), 2018, vol. 23, issue 02, 1-20

Abstract: Institutional theory has been widely used to explain entrepreneurship in the informal economy. A first wave of institutionalist theory argued that informal entrepreneurship resulted from formal institutional failures and a second wave that such entrepreneurship results from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. This paper evaluates the validity of these two waves of institutionalist explanation and a new third wave of institutional theory explaining informal entrepreneurship in terms of a lack of both vertical and horizontal trust. Reporting data from a 2013 survey in Kosovo involving 500 face-to-face interviews with owners of small and medium-sized enterprises, 35.7 percent of sales are estimated to be unreported and a regression analyses reveals this is significantly higher among smaller and older firms, and firms owned by men. No significant association is found between formal institutional failings and the under-reporting of sales, but there is a statistically significant correlation between sales under-reporting and the level of vertical and horizontal trust. Taking account of the limitations of this single country study, the implications for theory and policy are then discussed.

Keywords: Informal sector; entrepreneurship; Kosovo; development economics; institutional theory (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1084946718500115
Access to full text is restricted to subscribers

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:wsi:jdexxx:v:23:y:2018:i:02:n:s1084946718500115

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1084946718500115

Access Statistics for this article

Journal of Developmental Entrepreneurship (JDE) is currently edited by Peter Koveos

More articles in Journal of Developmental Entrepreneurship (JDE) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().