Lahore School of Economics

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Beyond a dichotomous depiction of formal and informal sector entrepreneurship: a degrees of informalisation approach

Muhammad S. Shahid, Lahore University of Management Sciences, Lahore, Pakistan

The aim of this paper is to transcend the dominant dichotomous depiction of formal and informal sector entrepreneurs as separate and discrete groups by rereading entrepreneurs as existing on a spectrum from wholly formal to wholly informal. To apply this degree of (in) formalization approach in order to advance debates about informal sector entrepreneurship, a 2012 survey is reported of 300 entrepreneurs in Pakistan. Evaluating what influences the degree of (in) formalization of entrepreneurs, the finding is that lower levels of formalization are strongly associated with younger and less educated entrepreneurs and those concerned about public sector corruption, high taxes and have resentment towards the government. The paper concludes by calling for a move beyond discussing informal sector entrepreneurs as a separate category to formal sector entrepreneurs and for the adoption of a degrees of in formalization approach and explores the theoretical and policy implications of adopting such an approach.


Dr. Muhammad Shehryar Shahid is an Assistant Professor of Entrepreneurship at Suleman Dawood School of Business at LUMS and is also a leading member of the Entrepreneurship Working Group at the university. He has a doctorate degree from the University of Sheffield, UK in the area of Entrepreneurship. He has been educated from the Lahore University of Management Sciences (LUMS), Ghulam Ishaq Khan Institute of Engineering Sciences and Technology (GIKI) and Aitchison College, Lahore. Previously, he has served as the Head of Management and Organisation Division and the Director of Centre for Entrepreneurship and SMEs (CESME) at the University of Central Punjab. He has taught courses, like Entrepreneurship, Business Model Development, Lean Launchpad and SME Management at both undergrad and postgrad level. His research interests are in the areas of informal entrepreneurship, small business growth and entrepreneurial intentions.

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posted by S A J Shirazi @ 5/31/2014 09:00:00 AM,

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