Do small business start-ups test-trade in the informal economy? Evidence from a UK survey

Abstract

Abstract:The aim is to evaluate critically whether small businesses start-up in the informal economy and whether they do so to test-trade the viability of their businesses. Reporting a 2012 survey of 595 small business owners in the UK, 20% report trading informally when starting their business, 64% of whom asserted a main reason was to test its viability. Some 13% of all small businesses therefore start-up test-trading in the informal economy, although multivariate analysis shows that businesses started by men, with low current annual turnovers in particular sectors are significantly more likely to do so. Regional variations are not significant. The outcome is a call for not only similar studies in other countries to determine the proportion of enterprises that start up test-trading in the informal economy but also a discussion of the policy implications of this finding.

Evaluating the policy approach towards the undeclared economy in FYR Macedonia

“…This is similarly the situation elsewhere in Europe (Williams and Martinez, 2014a, 2014c, 2014d. Stankovic and Stankovic (2012) and Tevdoski (2011), meanwhile, note that undeclared work is particularly prevalent in relation to seasonal jobs, temporary or parttime work and affects mostly those with low educational qualification levels, as well as low earners.…”

A decade of the <i>International Journal of Entrepreneurship and Small Business</i>: a bibliometric analysis

“…), entrepreneurial education or gender differences in entrepreneurship. Additionally, we have conducted the analysis of the average emergence year of keywords, from which it emerged that the most recent keywords are informal economy or informal sector, used, for example, by Williams and Martinez (2014) or Ratten (2016); consequently, these issues also represent promising research topics for…”

“…Thus, the orange or red keywords denote a switch to typical modern management and economic topics such as shadow and informal economy, informal sector, and social entrepreneurship. For example, we can consider the recent paper of Williams and Martinez (2014), that aims at providing, for the first time, an estimation of the proportion of businesses which start new trading in informal economy in order to test-trade their business. These findings cannot be generalized because the analysis refers to small sample in just one country; nevertheless, this paper is important to stimulate further researches on nascent entrepreneurship.…”

Why do Informal Sector Competitors Hinder Formal Entrepreneurs More in Some Countries?

“…Como o empreendedorismo do setor informal tornou-se uma subdisciplina proeminente no campo do empreendedorismo (Ferreira et al, 2019), a literatura sobre o tema tem se expandido rapidamente, especialmente em relação aos seus impactos no ambiente de negócios mais amplo (Afreh et al, 2019;Berdiev et al, 2020;Coletto & Bisschop, 2017;Dana, 2001Dana, , 2010Dana, , 2013Ilias et al, 2020;Khan & Quaddus, 2015;Mróz, 2012Omri, 2020Ram et al, 2017;Webb et al, 2009Webb et al, , 2013Williams, 2018). Até agora, foram realizados estudos sobre quais tipos de negócios participam do setor informal (Thai & Turkina, 2014;Williams & Horodnic, 2016;Williams & Martinez-Perez, 2014), se os proprietários são motivados por necessidade e/ou por oportunidades (Maloney, 2004;Perry & Maloney, 2007), a variada extensão em que as empresas operam no setor informal (Autio & Fu, 2015) e como explicar sua prevalência (Dau & Cuervo-Cazurra, 2014;Siqueira et al, 2016). Aqui, em primeiro lugar, o conhecimento emergente sobre a dimensão do empreendedorismo do setor informal é revisado e, em segundo lugar, a gama de teorias concorrentes para as variações entre países no empreendedorismo informal é empregada.…”