Main Article Content


This study investigates the global dynamics of the informal economy and the need for the coexistence of both the informal and formal economy. Developing and developed countries are beset with various forms of social and economic problems such as unemployment, poverty levels, informal jobs, and global issues. Informal Entrepreneurship remains a focal means to reduce unemployment and create jobs in many economies. Using the Institutional theory, the dynamics of informal economy and entrepreneurship were investigated using a qualitative approach and secondary data from the International Labour Organization and Women in Informal Employment: Globalizing and Organizing datasets. The findings depict the need to ensure that both the informal and the formal economy coexist well rather than merging them due to their interwoven nature. This calls for the adoption of a system and holistic perspective for studying facets of informal-formal entrepreneurship in different contexts Informal economy and informal entrepreneurship are essential for the reduction of global unemployment and development of innovation in the value chain in their contexts. Globally, informal economy and informal entrepreneurship provide safety nets, a source of livelihood, and pay informal levies that contribute to economic growth and development. The study shows how informal entrepreneurship contributes to the business environment. The contextual evidence from the literature justifies the necessity for informal entrepreneurship and the economy due to the interplay of imperfect market conditions, institutional voids, entrepreneurial behavior, and local business dynamics.

Article Details

How to Cite
Banwo, A. O., & Momoh, B. (2022). The Contextual Dimensions of Informal Economy and Entrepreneurship. Management & Economics Research Journal, 4(2), 63-82.
Cited by


  1. Adeola, O., & Anibaba, Y. (2018). Bottom of the Pyramid Marketing: Examples from Selected Nigerian Companies. In Bottom of the Pyramid Marketing: Making, Shaping and Developing BoP Markets (pp. 200-250).
  2. Afreh, B., Rodgers, P., Vershinina, N., & Williams, C. (2019a). Varieties of context and informal entrepreneurship. International Journal of Entrepreneurial Behavior Research in organizations: Foundations and methods of inquiry.
  3. Afreh, B., Rodgers, P., Vershinina, N., & Williams, C. (2019b). Varieties of context and informal entrepreneurship: Entrepreneurial activities of migrant youths in rural Ghana. 25(5), 996-1013.
  4. AguIgwe, P., & Ochinanwata, C. (2021). How to start African Informal entrepreneurial revolution? Journal of African Business, 1-18.
  5. Alfers, L., Francie Lund & Rachel Moussie. (2018). Informal Workers & The
  6. Future of Work: A Defence of Work-Related Social Protection. WIEGO Working Paper No. 37.
  7. Başbay, M. M., Elgin, C., & Torul, O. J. E. S. (2018). Socio-demographics, political attitudes and informal sector employment: A cross-country analysis. 42(4), 556-568.
  8. Berrou, J.-P., & Combarnous, F. J. R. o. s. e. (2012). The personal networks of entrepreneurs in an informal African urban economy: Does the ‘strength of ties’ matter? , 70(1), 1-30.
  9. Berrou, J.-P., & Gondard-Delcroix, C. J. R. o. S. e. (2018). Dynamics of social networks of urban informal entrepreneurs in an African economy. 76(2), 167-197.
  10. Bonnet, F., Vanek, J., & Chen, M. J. I. L. O., Geneva. (2019). Women and Men in the Informal Economy: A Statistical Brief.
  11. Breazeale, N. D., & Hustedde, R. J. J. T. e. c. d. L. c. (2017). Understanding the impact of culture in entrepreneurship. Toward entrepreneurial community development: Leaping cultural leadership boundaries, 104-125.
  12. Carpenter, A., & Greene, K. J. T. i. e. o. i. c. (2015). Social penetration theory. 1-4.
  13. Chen, M. A. (2012). The informal economy: Definitions, theories and policies. WIEGO Working Paper No. 1.
  14. Chu, N. J. C., Theory, & Critique. (2018). The paradoxes of creativity in Guangzhou, China’s wholesale market for fast fashion. 59(2), 178-192.
  15. Colman, A. M. J. B., & sciences, b. (2003). Cooperation, psychological game theory, and limitations of rationality in social interaction. 26(2), 139-153.
  16. De Castro, J. O., Khavul, S., & Bruton, G. D. J. S. E. J. (2014). Shades of grey: how do informal firms navigate between macro and meso institutional environments? , 8(1), 75-94.
  17. Desta, C. G. J. E. A. S. S. R. R. (2018). The urban informal economy in Ethiopia: Theory and empirical evidence. 34(1), 37-64.
  18. Dube, G., & Casale, D. J. D. P. R. (2019). Informal sector taxes and equity: Evidence from presumptive taxation in Zimbabwe. 37(1), 47-66.
  19. Dumbili, E., & Henderson, L. (2020). The challenge of plastic pollution in Nigeria. In Plastic Waste and Recycling (pp. 569-583). Elsevier.
  20. Erdős, L. (2019). Oil Is Blood–The Fight of Ken Saro-Wiwa. In Green Heroes (pp. 177-180). Springer.
  21. Granovetter, M. J. J. o. e. p. (2005). The impact of social structure on economic outcomes. 19(1), 33-50.
  22. Grossman, S. J. W. P. (2020). The politics of order in informal markets: Evidence from Lagos. 72(1), 47-79.
  23. Gurtoo, A., & Williams, C. C. J. (2009). Entrepreneurship and the informal sector: some lessons from India. The International Journal of Entrepreneurship Innovation, 10(1), 55-62.
  24. Henning, S., & Akoob, K. (2017). Motivational factors affecting informal women entrepreneurs in North-West Province. 9(1), 1-10.
  25. Idowu, A. A. (1999). Human rights, environmental degradation and oil multinational companies in Nigeria: The Ogoniland episode. Netherlands quarterly of human rights, 17(2), 161-184.
  26. ILO. (2020). World Employment and Social Outlook – Trends 2020.
  27. ILO. (2013). Measuring informality: A statistical manual on the informal sector and informal employment. International Labour Office.
  28. ILO. (2015). The Transition from the Informal to the Formal Economy. ILC 104/2015, Report V (2B). ILO Publications.
  29. ILO. (2020). World Employment and Social Outlook Trends 2020.
  30. Meagher, K. (2013). Unlocking the informal economy: A literature review on linkages between formal and informal economies in developing countries. 27.
  31. Meagher, K. (2018). Cannibalizing the informal economy: frugal innovation and economic inclusion in Africa. The European Journal of Development Research, 30(1), 17-33.
  32. Medina, L., Jonelis, M. A. W., & Cangul, M. (2017). The informal economy in Sub-Saharan Africa: Size and determinants. International Monetary Fund.
  33. Mori, N. (2014). Women’s entrepreneurship development in Tanzania: insights and recommendations (Women's Entrepreneurship Development, Issue. ILO.
  34. Mugabi, E. (2014). Women’s entrepreneurship development in Uganda: insights and recommendations (Women's Entrepreneurship Development, Issue. ILO.
  35. Murithi, W., Vershinina, N., & Rodgers, P. J. I. J. o. E. B. (2019). Where less is more: institutional voids and business families in Sub-Saharan Africa. International Journal of Entrepreneurial Behavior Research in organizations: Foundations and methods of inquiry.
  36. Mwatsika, C. (2022). Reflecting on the Entrepreneurship Paradox in Sub-Saharan Africa. Management & Economics Research Journal, 4(1).
  37. Neuwirth, R. (2012). Stealth of Nations: The global rise of the informal economy. Anchor.
  38. Niels Bosma, S. H., Aileen Ionescu-Somers, Donna Kelley, Jonathan Levie, Anna Tarnawa. (2020). Global Entrepreneurship Monitor 2019/2020 Global Report (Global Entrepreneurship Monitor, Issue. G. E. R. A. (GERA).
  39. North, D. (1993). Five propositions about institutional change.
  40. Obi, C. (2019). Oil and the International Politics of the African State. In Oxford Research Encyclopedia of Politics.
  41. Ogunsade, I. A., & Obembe, D. J. (2016). The influence of informal institutions on informal sector entrepreneurship: a study of Nigeria's hand-woven textile industry. Journal of Small Business Entrepreneurship Theory and Practice, 28(6), 413-429.
  42. Okolie, U. C., Ehiobuche, C., Igwe, P. A., Agha-Okoro, M. A., & Onwe, C. C. (2021). Women Entrepreneurship and Poverty Alleviation: Understanding the Economic and Socio-cultural Context of the Igbo Women’s Basket Weaving Enterprise in Nigeria. Journal of African Business, 1-20. ttps://
  43. Olabisi, J., Afolabi, A., Olagunju, A., Madariola, F. A. J. E., & Business. (2020). Effect of Informal Sector Tax Revenue on Capital Development in Lagos Metropolis. 34(1), 1-14.
  44. Omri, A. J. J. o. B. R. (2020). Formal versus informal entrepreneurship in emerging economies: The roles of governance and the financial sector. 108, 277-290.
  45. Onokala, U., & Banwo, A. J. A. A. R. i. M. (2015). Informal sector in Nigeria through the lens of apprenticeship, education and unemployment. 1(1), 13-22.
  46. Osei-Boateng, C., & Ampratwum, E. (2011). The informal sector in Ghana. Friedrich-Ebert-Stiftung, Ghana Office Accra.
  47. Oyedele, A., & Firat, F. J. I. M. R. (2019). Institutions, small local firms’ strategies, and global alliances in sub-Saharan Africa emerging markets.
  48. Payaud, M. A. J. G. B., & Excellence, O. (2014). Marketing strategies at the bottom of the pyramid: Examples from Nestle, Danone, and Procter & Gamble. 33(2), 51-63.
  49. Qian, J. J. D., & Perspective, P. R. A. G. C. (2019). 13 The urban informal sector and development in China. 227.
  50. Scott, W. R. J. G. m. i. m. T. p. o. t. d. (2005). Institutional theory: Contributing to a theoretical research program. 37(2005), 460-484.
  51. Webb, J. W., Bruton, G. D., Tihanyi, L., & Ireland, R. D. J. J. o. B. V. (2013). Research on entrepreneurship in the informal economy: Framing a research agenda. 28(5), 598-614.
  52. Webb, J. W., Tihanyi, L., Ireland, R. D., & Sirmon, D. G. J. A. o. M. R. (2009). You say illegal, I say legitimate: Entrepreneurship in the informal economy. 34(3), 492-510.
  53. Welter, F. (2005). Entrepreneurial behavior in differing environments. In Local heroes in the global village (pp. 93-112). Springer.
  54. WIEGO. (2018). Counting the World’s Informal Workers: A Global Snapshot.
  55. Williams, C. C., & Krasniqi, B. J. J. o. D. E. (2018). Explaining informal sector entrepreneurship in Kosovo: An institutionalist perspective. 23(02), 1850011.
  56. Williams, C. C., & Martinez-Perez, A. J. J. o. B. R. (2014). Why do consumers purchase goods and services in the informal economy? , 67(5), 802-806.