What is it about?

This paper evaluates the effect of unregistered and informal sector business ventures on the growth of formal sector enterprises. The hypotheses tested is that formal sector enterprises that have to compete against unregistered or informal sector business ventures suffer from lower levels of performance, measured by annual sales growth, annual employment growth and annual productivity growth. To evaluate this thesis, data is reported from a World Bank Enterprise Survey (WBES) of 760 enterprises in Italy collected in 2019.

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Why is it important?

The finding is that formal sector enterprises that report competing against unregistered or informal sector business ventures have significantly lower annual sales growth and annual productivity growth than enterprises that do not. The paper concludes by discussing the theoretical and policy implications, along with the limitations of the study and future research required.

Perspectives

Reveals that in Italy, formal sector enterprises that report competing against unregistered or informal sector business ventures have significantly lower annual sales growth and annual productivity growth than enterprises that do not.

Professor Colin C Williams
University of Sheffield

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This page is a summary of: EVALUATING THE EFFECTS OF THE INFORMAL SECTOR ON THE GROWTH OF FORMAL SECTOR ENTERPRISES: LESSONS FROM ITALY, Journal of Developmental Entrepreneurship, September 2020, World Scientific Pub Co Pte Lt, DOI: 10.1142/s1084946720500193.
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