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The Impacts Of Informality On Enterprise Innovation, Survival And Performance: Some Evidence From Pakistan

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  • SANA ULLAH

    (School of Economics, Quaid-i-Azam University Islamabad, Pakistan)

  • COLIN C. WILLIAMS

    (Management School, University of Sheffield, Conduit Road, S10 1FL, UK)

  • BABUR WASIM ARIF

    (Department of Social Sciences, Iqra University, Islamabad, Pakistan)

Abstract

The aim of this paper is to evaluate the relationship between informality, innovation and firm survival. To do so, a study of a cluster of electrical fittings firms in Pakistan is reported. Reporting bivariate and multivariate probit models to analyze two surveys conducted between 2008 and 2017, the finding is that there is a significant relationship between informality and the extent of innovation, firm survival and firm performance. Informality has an adverse negative effect on firm-level innovation, firm survival and firm performance. Given that formal enterprises in this cluster are better performing in terms of innovation, survival and employment growth than informal businesses, the paper concludes by discussing the theoretical, policy and research implications.

Suggested Citation

  • Sana Ullah & Colin C. Williams & Babur Wasim Arif, 2019. "The Impacts Of Informality On Enterprise Innovation, Survival And Performance: Some Evidence From Pakistan," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-19, September.
    • Handle: RePEc:wsi:jdexxx:v:24:y:2019:i:03:n:s1084946719500158
    DOI: 10.1142/S1084946719500158
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    Cited by:

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    2. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    3. Esther Salvi & Frank-Martin Belz & Sophie Bacq, 2023. "Informal Entrepreneurship: An Integrative Review and Future Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(2), pages 265-303, March.
    4. Assefa, Dawit Z. & Liao, Ching T. & Misganaw, Bisrat A., 2022. "Unpacking the negative impact of initial informality on innovation: The mediating roles of investments in R&D and employee training," Technovation, Elsevier, vol. 114(C).
    5. Yuanqin Ge, 2022. "RETRACTED ARTICLE: The impact of dynamic knowledge management capability on enterprise innovation performance," Operations Management Research, Springer, vol. 15(3), pages 1048-1059, December.
    6. Sharma, Gautam & Dahlstrand, Åsa Lindholm, 2023. "Innovations, informality, and the global south: A thematic analysis of past research and future directions," Technology in Society, Elsevier, vol. 75(C).
    7. Babur Wasim Arif & Sana Ullah, 2021. "From subcontractors to company owners: modeling firm-type choices in industrial clusters," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 153-161, December.

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