Constraints to informal entrepreneurs in developing countries

An empirical analysis

by Jens Krüger
Doctoral thesis
Date of Examination:2013-09-06
Date of issue:2013-10-23
Advisor:Prof. Dr. Jann Lay
Referee:Prof. Dr. Jann Lay
Referee:Prof. Dr. Stephan Klasen
Persistent Address: http://dx.doi.org/10.53846/goediss-4104

 

 

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Abstract

English

This thesis aims to narrow the research gap on informal enterprises, contributing to both the academic and policy debates. It provides empirical evidence related to two key questions: how much potential do informal firms have to contribute to economic growth, and employment creation? And, if that potential exists; what constrains prevent informal entrepreneurs from reaching their full potential? The results on marginal returns to capital in Chapter 1 and on employment growth in Chapter 3 indicate that the potential of informal enterprises may be substantial, if constraints to growth can be overcome. Chapters 1, 2 and 3 provide new evidence on the specific constraints facing informal entrepreneurs. The chapters focus respectively on: monetary entry barriers, inefficient allocation of inputs by gender and lack of access to international markets. The final chapter examines the impact of changes in the firm distribution – influenced heavily by the success or failure of small, largely informal firms – on wage inequality, a variable of significant policy interest. This illustrates some of the implications of the existence and expansion of informal enterprises for the overall economy.
Keywords: Informality, informal enterprises, inequality, Sub-Saharan Africa, Asia, Thailand, capital constraints, gender
 
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