In many developing countries, buyer-seller exchange among the poor occurs mainly in unique, socially embedded environments that are essentially informal markets. This article describes the findings of an in-depth, in situ study of an informal-economy subsistence marketplace in South India. Through interviews with consumers and owners of survivalist microenterprises, the authors identify seven themes that characterize the subsistence marketplace context, buyer-seller interactions within them, and specific elements of exchange. Drawing on these findings, along with theories of social capital and consumption in poverty, they make the case that business policy in developing countries should aim to empower subsistence entrepreneurs and consumers, embrace emergent solutions, help build bridges between informal and formal economies, and adopt a bottom-up orientation to policy development. The study's findings offer important insights into policy that can help microenterprises of the informal economy become engines of economic growth in these countries.

We study subsistence entrepreneurship, defined as entrepreneurial actions undertaken by individuals living in poverty. Subsistence entrepreneurs are important elements of the global economy. By virtue of being poor themselves and co-locating in the same community as their customers living in poverty, subsistence entrepreneurs create value for their customers more effectively than outside entities. We suggest that this marketing exchange (micro-level phenomenon) leads to the building of a communitylevel exchange system that is unique and inimitable (meso-level phenomenon). Viewing through the theoretical lens of social capital, we develop insights gleaned from qualitative interviews with subsistence entrepreneurs. Community marketing systems that arise out of micro-level interactions between subsistence entrepreneurs and their customers form the glue holding the so-called ''informal economy'' together in subsistence economies.

Marketplace exchange occupies a central place in the lives of poor consumers and entrepreneurs across the world. The subsistence marketplaces literature has systematically examined marketplace exchanges in contexts of poverty and built a critical mass of knowledge. This knowledge stems from an approach with roots in the discipline of marketing and represents the unique contribution of scholars in marketing and related disciplines to the global discourse on poverty. This article reviews a decade and a half of research on subsistence marketplaces and clarifies certain conceptual, methodological and axiological positions that underlie marketing theory generation within this stream of research.

More than a billion entrepreneurs worldwide live in subsistence contexts and run microenterprises to meet life's basic consumption needs. In this article, the authors investigate how two types of consumption constraints in poverty, chronic and periodic constraints, combine to influence entrepreneurial intention. Chronic and periodic constraints are concomitant in subsistence marketplaces and represent consumption-side constraints. A field experiment shows that chronic constraints amplify entrepreneurial intention, but this effect is contingent on the level of periodic constraints. When experiencing low periodic constraints, people with high chronic constraints have greater entrepreneurial intentions than do those with low chronic constraints. When experiencing more periodic constraints, however, the authors do not find this difference. Another field experiment shows the effectiveness of marketplace literacy education in alleviating the adverse impact of periodic constraints through enhancing entrepreneurial self-efficacy. The authors present specific policy recommendations for government, social enterprise, and business relating to enhancing entrepreneurship among the poor in the face of such constraints.

Implementation of social innovations in subsistence marketplaces often fails as a result of not bringing about institutional change. In this article, we study the process through which social enterprises facilitate local communities in effecting the process of institutional change as they introduce social innovations. Analyzing rich ethnographic data from 19 social enterprises, we develop the process of "facilitated institutional work" for implementing social innovation. We present a process model for implementing social innovation with four distinct stages involving social enterprises-(1) legitimating themselves within local communities, (2) disrupting aspects of the local institutional environment, (3) helping re-envision institutional norms or practices, and (4) resourcing the institutional change process. The four stages relate to important concerns that local communities have in working with social enterprises implementing social innovations. These community-level concerns revolve around the following questions: (1) Why should we allow an external social enterprise to be involved in our affairs? (2) Why do we need to change? (3) What should we change and what should we sustain? and (4) What role should we play in implementing change (such as in mobilizing resources)? This article demonstrates that bringing about institutional change is often necessary for implementing social innovations in subsistence marketplaces. The findings depict a participatory approach in which social enterprises work with local communities to bring about the institutional conditions necessary for implementing social innovation. Practitioner Points• Bringing about institutional change is necessary for implementing social innovations in subsistence marketplaces.• Institutional change for social innovation is brought about through the interaction between local communities and social enterprises.• Paternalistic approaches aiming to impose change in a top-down fashion should be avoided. Romantic approaches that exaggerate the capacity of local communities to effect change should be avoided.• Local communities in subsistence marketplaces are proactive gatekeepers who can terminate relationships with social enterprises seeking to implement social innovations.• Social enterprises implementing social innovations must proactively address important concerns that local communities have in working with social enterprises.