Informal Entrepreneurship Theory
What is informal entrepreneurship? Informal entrepreneurship happens outside of the formal economy. The formal economy is the part that is legal and legitimate. The legal economy is where companies and entrepreneurs pay taxes, abide by regulations, and attain licenses that are set out by governments or institutions. Informal entrepreneurship is not about purely black market enterprises, like illegal gambling rings, outlaw biker gangs, or illegal fireworks factories. Informal entrepreneurship can involve everything from street vendors to domestic work within the home. In many societies, informal entrepreneurship is a major part of the economy, especially in developing countries. Often informal entrepreneurship is so normalized in a society that it is considered legitimate in the minds of the majority, even if it might also be illegal ( Webb et al., 2009 ). According to Suchman (1995) , legitimacy is: “a generalized perception or assumption that the actions of an entity are des