Entry and Stay in the Informal Economy: Qualitative Findings from a Least Developed Country

Gorah K. Abdallah and Emiel L. Eijdenberg ()
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Gorah K. Abdallah: Maastricht School of Management, Endepolsdomein 150, 6229 EP Maastricht, The Netherlands2Tanzania Institute of Accountancy, Kilwa Road, Dar Es Salaam, Tanzania
Emiel L. Eijdenberg: Business, IT and Science Department, James Cook University, 149 Sims Drive, Singapore 387380, Singapore

Journal of Enterprising Culture (JEC), 2019, vol. 27, issue 02, 115-145

Abstract: This study explores the factors determining the entry and stay of entrepreneurs in the informal economy in a Least Developed Country (LDC): Tanzania. Qualitative data from a focus group with six experts, and individual interviews with two experts and 15 entrepreneurs from the informal economy, were analysed. The results show that (1) necessity motivations are important for the entry and stay of entrepreneurs, as well as (2) the unattractive factors of the formal economy (e.g. degree of excessive regulations regarding high taxes)/attractive factors of the informal economy (e.g. little procedures, low capital requirements) and (3) low levels of education possessed by entrepreneurs, emerged as essential. This study enriches the literature with personal narratives of entrepreneurial activities from the micro level. Therefore, many detailed factors are revealed of the lives of entrepreneurs and experts, dealing in one way or the other with the informal economy.

Keywords: Developing countries; education; entrepreneurial motivation; entrepreneurs (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S0218495819500055

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