Harnessing the hidden enterprise culture

What is it about?

Providing support to off-the-books business start-ups to help them make the transition to legitimacy could be a novel and effective method of creating new legitimate business ventures. The purpose of this paper is to advance understanding of why some business start-ups operate off-the-books so as to explore how public policy might facilitate their transition towards formalisation.

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Why is it important?

This study inductively reveals that entrepreneurs’ rationales for trading off-the-books and the consequent barriers to formalisation differ according to whether the business start-up is wholly off-the-books, a registered business start-up conducting a portion of their trade off-the-books with no intention of further formalising, or a registered business start-up in transition to legitimacy. The outcome is that policy measures to facilitate formalisation need to be tailored to tackle the varying reasons for each type of business start-up trading off-the-books.

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