THE IMPACTS OF INFORMALITY ON ENTERPRISE INNOVATION, SURVIVAL AND PERFORMANCE: SOME EVIDENCE FROM PAKISTAN

Sana Ullah (), Colin Williams and Babur Wasim Arif ()
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Babur Wasim Arif: Department of Social Sciences, Iqra University, Islamabad, Pakistan

Journal of Developmental Entrepreneurship (JDE), 2019, vol. 24, issue 03, 1-19

Abstract: The aim of this paper is to evaluate the relationship between informality, innovation and firm survival. To do so, a study of a cluster of electrical fittings firms in Pakistan is reported. Reporting bivariate and multivariate probit models to analyze two surveys conducted between 2008 and 2017, the finding is that there is a significant relationship between informality and the extent of innovation, firm survival and firm performance. Informality has an adverse negative effect on firm-level innovation, firm survival and firm performance. Given that formal enterprises in this cluster are better performing in terms of innovation, survival and employment growth than informal businesses, the paper concludes by discussing the theoretical, policy and research implications.

Keywords: Industrial cluster; informal economy; informal sector; entrepreneurship; firm survival; firm performance; innovation; Pakistan (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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DOI: 10.1142/S1084946719500158

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