Understanding internationalisation of informal African firms through a network perspective

Abstract

Studies of internationalisation have largely overlooked developing countries with high levels of legitimate informal entrepreneurship. Consequently, this article analyses the internationalisation of Informal African Firms (IAFs) from a network perspective. We undertook in-depth case studies of 14 informal smaller firms in two major enterprise clusters in Ghana. Our findings show that half transacted business in five to seven foreign markets, and more than half sold abroad within three years of inception. The study illustrates the different network ties that influence passive and active internationalisation strategies with evidence that these IAFs developed buyer networks through customer referrals and foreign customer walk-ins to the firm. Overall, we provide a comprehensive understanding of the triggers that initiate international business activities by IAFs so contribute to current theorising noting implications for management practices and policymaking on this important but hitherto, under-explored issue.

International entrepreneurship in Sub-Saharan Africa: interfirm coordination and local economy dynamics in the informal economy

“…, 2017b). Contemporary studies have emphasized the critical role of relationships and social networks in a firm's foreign market expansion and entry (Boafo et al. , 2022; Cuypers et al.…”

“…, 2017). Managerial network ties developed in African economies are mostly relational; they are created through social relationships and interactions between managers of organizations and external entities (Acquaah, 2007; Boafo et al. , 2022).…”

“…Hence, they are very heterogeneous in terms of levels of informalization (Williams et al. , 2020), the extent of being opportunity-driven (Achua and Lussier, 2015), market outreach (Amoako and Lyon, 2014; Boafo et al. , 2022; Böhme and Thiele, 2012), growth (Abdallah, 2017; Grimm et al.…”

“…Informal enterprises in sub-Saharan Africa generally involve low-and high-return entrepreneurial activities. Hence, they are very heterogeneous in terms of levels of informalization (Williams et al, 2020), the extent of being opportunity-driven (Achua and Lussier, 2015), market outreach (Amoako and Lyon, 2014;Boafo et al, 2022;B€ ohme and Thiele, 2012), growth (Abdallah, 2017;Grimm et al, 2012;Tang and Konde, 2021) and productivity (Amin and Islam, 2015;Benjamin and Mbaye, 2012). Enterprises in the informal sector are also an essential complement to the formal economy (B€ ohme and Thiele, 2014;Chen, 2016;Meagher, 2013).…”

Behavior of customers and traders in informal markets. Case study in Santo Domingo, Ecuador

“…The studies on informal markets are varied according to the interests of analysis; Several authors (John & Ross, 2018;Shaw, 2018; link it to the trade of specific products such as: Wood, Medicines, Cigarettes, Housing, among others. Similarly, there is dispersion in the countries where the subject is analyzed, studies exist on the five continents (Kiggundu & Pal, 2018;Martinez & Rivera-Acevedo, 2018;Vogel & Musamba, 2018;Zelano, 2018;Boafo et al, 2022). Proof of the foregoing is the increase in the number of publications of the subjects in journals indexed in the Scopus database in the last two decades, as reflected in figure 1.…”