Sight unseen: The visibility paradox of entrepreneurship in an informal economy

Robert Nason, Siddharth Vedula (), Joel Bothello (), Sophie Bacq and Andrew Charman
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Robert Nason: McGill University = Université McGill [Montréal, Canada]
Siddharth Vedula: TUM - Technische Universität Munchen = Technical University Munich = Université Technique de Munich
Joel Bothello: EM - EMLyon Business School
Sophie Bacq: International Institute for Management Development (Switzerland, Lausanne) - IMD
Andrew Charman: Sustainable Livelihoods Foundation (South Africa, Cape Town) - SLF

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Abstract: In many informal economies, entrepreneurs face a visibility paradox: increasing visibility to resource-granting stakeholders simultaneously increases exposure to resource-extracting stakeholders. To investigate this phenomenon, we leverage a unique, hand-collected, small-area census dataset of firms in the township of Delft in Cape Town, South Africa, providing rare insight into a population of otherwise unobserved firms. Through an abductive, multimethod approach, we address three interrelated research questions: (i) How do informal economy entrepreneurs make their firms visible? (ii) Which informal economy entrepreneurs make their firms visible? (iii) How does firm visibility relate to firm performance? Our analysis identifies distinct dimensions of authority- and community-oriented visibility and introduces the concept of selective visibility, which refers to making a firm visible to certain stakeholders (e.g., community members) but not others (e.g., authorities). Using a social embeddedness lens, we find that while highly embedded entrepreneurs are more associated with invisibility, less embedded entrepreneurs are more associated with community-oriented selective visibility. The QCA results also indicate a configurational relationship such that visibility's association with performance varies with an entrepreneur's level of embeddedness. As a whole, our study builds theory regarding the taken-for-granted concept of firm visibility and provides important insights that are generative for entrepreneurship research in informal economies and other difficult-to-access settings.

Keywords: Fuzzy set qualitative comparative analysis (fsQCA); Informal economy; Poverty and entrepreneurship; Visibility (search for similar items in EconPapers)
Date: 2023-12-02
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Published in Journal of Business Venturing, In press, 39 (2), ⟨10.1016/j.jbusvent.2023.106364⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05511790

DOI: 10.1016/j.jbusvent.2023.106364

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