What is it about?

This paper evaluates critically the relationship between starting-up unregistered and firm performance. The widespread belief across all the dominant theories of informal entrepreneurship is that unregistered start-ups experience poorer future firm performance than those registered from the outset of their operations. To evaluate this poorer performance thesis, this paper reports World Bank Enterprise Survey (WBES) data on 377 enterprises in Albania collected in 2019.

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Why is it important?

After controlling for other determinants of firm performance, the finding is that formal enterprises that started-up unregistered have significantly higher annual sales growth than enterprises that registered from the outset. To explain this, the argument is that in weak institutional environments, such as Albania, the advantages of operating unregistered at the outset outweigh the benefits of registration. The result is a call to re-theorize firm performance in the informal sector and for policy to shift toward a more facilitating approach that enhances benefits of registration.

Perspectives

Reveals the implications of entrepreneurs starting-up unregistered on future firm performance

Professor Colin C Williams
University of Sheffield

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This page is a summary of: EVALUATING THE IMPLICATIONS OF STARTING-UP UNREGISTERED ON FUTURE FIRM PERFORMANCE: EVIDENCE A 2019 SURVEY IN ALBANIA, Journal of Developmental Entrepreneurship, June 2020, World Scientific Pub Co Pte Lt, DOI: 10.1142/s1084946720500107.
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