Research on entrepreneurship in the informal economy: Framing a research agenda

The informal economy consists of economic activities that occur outside of formal institutional boundaries but which remain within informal institutional boundaries for large segments of society. We draw from diverse disciplines to frame research concerning entrepreneurship in the informal economy around three separate theories: institutional theory, motivation-related theories from a sociological perspective, and resource allocation theory. Each of these theories provides a complementary lens through which to examine the incentives, constraints, motivations, strategies, and abilities of entrepreneurs to operate and grow their ventures in the informal economy. Employing these theoretical perspectives facilitates efforts to highlight the breadth of informal economy research in different domains and lays foundations for future entrepreneurship research. ► We frame informal economy research within three separate theories. ► Institutional theory, motivation-related theories, and resource allocation theory frame informal economy research. ► Each framing is used to develop propositions that may serve as a foundation for future research.