Differences between firms from the formal sector and the informal sector in terms of growth

2017 ◽  
Vol 9 (2) ◽  
pp. 121-143 ◽  
Author(s):  
Gorah Kassim Abdallah
Keyword(s):  
Informal Sector ◽  
Small Businesses ◽  
Field Work ◽  
Developed Countries ◽  
Measurement Scale ◽  
Annual Growth Rate ◽  
Formal Sector ◽  
Chi Square ◽  
Content Type ◽  
Significant Difference

Purpose Small businesses growth has become an important area of study in the field of entrepreneurship. This paper aims to extend the inquiry by investigating whether there is a significant difference in growth between firms from the formal sector and the informal sector in the least developing countries (LDCs), particularly Tanzania. Design/methodology/approach A survey strategy as well as non-probability sampling are used. The sampling included 50 formal and 61 informal small businesses from the furniture industry. Data collected were evaluated using chi square and compounded annual growth rate (CAGR) techniques. Findings The results indicate that firms from the formal sector do not grow faster than firms from the informal sector. on the contrary, our tests reveal that firms from the informal sector predominantly grow faster than firms from the formal sector. Research limitations/implications The study was conducted in Tanzania which is just one of the 48 LDCs in the world. Second, the literature that is used predominantly applies to developed countries. Third, the field work dependent on the respondent’s perception. Finally, change of measurement scale from five to three is ought to have contributed to mixed findings. Practical implications The overall implications are that external factors like inadequate regulatory tax systems may affect growth of formal small businesses and thus influence market opportunities for informal small businesses. Further, internal factors like inefficiencies of workers from formal enterprises may affect growth and therefore create more opportunities for informal enterprises. Originality/value Exploring differences between firms from the formal sector and the informal sector, and the way five scales were aggregated into three scales in the methodology.

Online teaching benefits and challenges during pandemic COVID-19: a comparative study of Pakistan and Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sahib Khatoon Thaheem ◽  
Mohamad Jafre Zainol Abidin ◽  
Quratulain Mirza ◽  
Habib Ullah Pathan
Keyword(s):  
Language Learning ◽  
Online Teaching ◽  
Developed Countries ◽  
Research Society ◽  
Computer Assisted ◽  
Online Classes ◽  
Structured Interviews ◽  
Public And Private ◽  
Content Type ◽  
Significant Difference

PurposeThe shift from physical class to online classes in the pandemic COVID-19 situation has posited opportunities as well as challenges for teachers and students. The primary purpose of this research is to investigate challenges faced and benefits availed by the teachers at the tertiary level in universities of Pakistan and Indonesia.Design/methodology/approachTo achieve the purpose a mixed-method approach is employed to answer the three research questions of the present study. The quantitative data is obtained from the responses of 66 teachers, teaching online in Mehran UET Pakistan and 102 teachers from Indonesian university. The personal, technological, and pedagogical challenges were analyzed by descriptive statistics on SPSS. Thus, the independent-samples t-test was run to test for statistically significant differences faced by teachers in both countries.FindingsThe findings revealed that there were no statistically significant differences found in personal, and pedagogical challenges faced by both countries' teachers, whereas there is a significant difference in facing technological challenges between Pakistani and Indonesian teachers. The benefits of online teaching were investigated qualitatively by conducting semi-structured interviews with 10 teachers 5 from each country. There are very positive aspects of online teaching revealed in the interviews.Research limitations/implicationsThe paper includes implications for the development of Computer Assisted Language Learning, the development of technology integrated courses, and for managing the balance between physical and online classes.Practical implicationsThe findings of the study have implications on finding out the solutions of the derived challenges, further it suggests to concentrate on students of public and private universities in Pakistan and Indonesia so that a comparison of challenges faced by teachers and faced by students can be researched and evaluated and it can generate significantly different results.Social implicationsThe implications on the research society and the teachers and designers' communities are very clear in this research because it paves the way forward towards the blending of technology in any way either synchronously/ asynchronously into education, further researches can be done on designing the new concepts, courses, instructional platforms for students and investigate the new dimensions and effects of them.Originality/valueFindings have value, because two countries' context (developing countries) with respect to the comparison of the challenges and benefits is better understood, it would have different results if had done in the developed countries.

scholarly journals MAJORITY/PLURALITY SYSTEMS: THE CHOICE OF LEAST DEVELOPED COUNTRIES?

2019 ◽  
Vol 17 (Suppl.1) ◽  
pp. 107-114
Author(s):  
D. Pastarmadzhieva
Keyword(s):  
Hypothesis Test ◽  
Electoral System ◽  
Developed Countries ◽  
Regime Type ◽  
Comparative Approach ◽  
Least Developed Countries ◽  
Electoral Process ◽  
Chi Square ◽  
Significant Difference ◽  
Chi Square Test

The electoral system of a country is related to the political, economic and social areas of life. Their functioning directly or indirectly depends on it and the different types and subtypes of electoral systems produce different effects. The purpose of the current study is to identify if there is a relation between the statute of the least developed countries and their electoral system. The object of the study are countries, defined as least developed in 2018 by the United Nations. The focus is the type of electoral system for the legislative body (or its lower chamber in case of bicameralism) of these countries, their regime type, overall score and the score for electoral process and pluralism according to EIU Democracy Index 2018. For the purposes of the analysis statistical methods (frequencies, hypothesis test and chi-square test) and comparative approach are used. The results show that there is statistically significant relationship between the statute of least developed countries and their electoral system on one hand and their regime type on other. There is also a statistically significant difference in the scores of least developed countries compared to all others regarding the evaluation of democracy and the electoral process and pluralism.

Mexico City street vendors and the stickiness of institutional contexts

2017 ◽  
Vol 13 (2) ◽  
pp. 119-135 ◽  
Author(s):  
Farzad H. Alvi ◽  
Jorge Alberto Mendoza
Keyword(s):  
Emerging Markets ◽  
International Business ◽  
Informal Sector ◽  
Rational Expectations ◽  
Macro Level ◽  
Formal Sector ◽  
Street Vendors ◽  
Content Type ◽  
Institutional Contexts ◽  
Micro Level

Purpose The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic responsiveness is impeded by defining institutional contexts as country-level aggregations (macro-level) and glossing over sub-national variations (micro-level). The purpose of this paper is to investigate micro-level contexts that can defy macro-level assumptions of economic rationality. Design/methodology/approach As a research site, the motivations of street vendors in Mexico City are analyzed in terms staying in one sub-national context, the informal sector, as opposed movement to another, the formal sector. Unanticipated reluctance to move from one context to another is defined as stickiness. Findings Sub-national institutional contexts are found to be sticky, with less movement between informal and formal sectors than would have been anticipated. Unexpectedly, it is found that a significant number of street vendors prefer the hardship of the informal sector to the relative security of the formal sector. Research implications International business research makes assumptions about the growth narrative of emerging markets, often characterizing a growing middle class as a rising tide that lifts all boats. In terms of further research on adapting strategy, however, assumptions of rational expectations ought to be tempered, as demonstrated by the stickiness of the informal sector. Originality/value A contribution is made to the international business literature by showing that macro-level assumptions about institutional context based on rational expectations of wealth-maximizing behavior in emerging markets may result in an incomplete view of institutional context. Ultimately, adaptation of strategy could be impaired as a result.

Female labour force participation: evidence from Ghana

2017 ◽  
Vol 44 (11) ◽  
pp. 1489-1505 ◽  
Author(s):  
Abena Yeboah Abraham ◽  
Fidelia Nana Akom Ohemeng ◽  
Williams Ohemeng
Keyword(s):  
Informal Sector ◽  
Rural Areas ◽  
Census Data ◽  
Labour Force ◽  
Labour Force Participation ◽  
Female Labour Force Participation ◽  
Formal Sector ◽  
Social Reforms ◽  
Female Labour ◽  
Content Type

Purpose The purpose of this paper is to examine female labour force participation (FLFP) and their employment choice between the formal and informal sectors after several institutional and social reforms such as Millennium Development Goal 3 aimed at promoting gender equality and empowerment of women by 2015, using data from Ghana’s 2010 Population and Housing Census. Design/methodology/approach In this paper, logit regression and multinomial logit techniques were employed. Findings The results show that FLFP has declined marginally from the 2005 figures; education remains the important factor in determining women’s participation in the formal sector. Strikingly 91 per cent of the FLFP is engaged in the informal sector of the Ghanaian economy, a sector with a very low contribution per head. Practical implications Interventions such as encouraging female education and retraining of self-employed females to improve upon their efficiency ought to be pursued vigorously; whiles developing rural areas for females to get equal labour opportunities and many others aimed at enhancing the efficiency and by inference earning per head of the informal sector is highly recommended. Originality/value The literature on the FLFP is thin in Ghana. The current study uses a census data unlike the previous studies and as such employed a huge sample size that reflects the reality in Ghana. The study contributed immensely to policy having established that 91 per cent of the female labour force is engaged in the informal sectors of the economy, and therefore any intervention targeting at reducing poverty and meeting the MDG 3 should be targeted at the informal sector of the Ghanaian economy.

Expanding East African tax base will face resistance

2016 ◽  
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Essential Role ◽  
Budget Deficits ◽  
Formal Sector ◽  
East African ◽  
Efficient Manner ◽  
Tax Base ◽  
Member States ◽  
Content Type

Significance Member states' national budgets include plans to increase taxation of the informal economy. Governments have several reasons for broadening tax bases: budget deficits, increasing debts, donor dependency, declining revenue from the formal sector and a desire to improve services and infrastructure. Impacts Limited state resources will hinder attempts to formalise economies through enforcement alone. Incentives will play an essential role in any attempt to expand the tax base. Unless implemented in an efficient manner, taxation of the informal economy could drain government funds and hurt informal businesses. Successful taxation of the informal sector will fail unless businesses see returns in services or infrastructure.

Superior economic performance in developed and developing countries

2017 ◽  
Vol 12 (1) ◽  
pp. 93-107 ◽  
Author(s):  
Sandra Ruiz ◽  
Paulo Arvate ◽  
Wlamir Xavier
Keyword(s):  
Developing Countries ◽  
Economic Performance ◽  
Probit Model ◽  
Developed Countries ◽  
Competitive Advantages ◽  
Content Type ◽  
Significant Difference ◽  
Kolmogorov Smirnov ◽  
The Difference ◽  
Using Data

Purpose The extant literature on emerging economies states that the development of the institutional context contributes to the creation of hypercompetitive conditions. The purpose of this paper is to test this assertion by using data from both developing and developed countries. Design/methodology/approach The study used a probit model, Kolmogorov Smirnov tests and propensity score matching to determine the difference in persistent superior economic performance. Panel data from 600 firms in 26 different countries were used for the period from 1995 to 2011. Findings The empirical results support the proposition that there is a significant difference in superior economic performance and persistent superior economic performance sustainability between firms in developed and developing countries. Originality/value This study contributes by fostering other theories related to competitive advantages and giving special emphasis to the comparison between developed and developing countries.

scholarly journals PENCEGAHAN TKI KEMBALI KE LUAR NEGERI MELALUI PELATIHAN UNTUK DAPAT BERWIRAUSAHA

Sarwahita ◽  
2016 ◽  
Vol 13 (1) ◽  
pp. 34-39
Author(s):  
Dede Rahmat Hidayat
Keyword(s):  
Middle East ◽  
Community Service ◽  
Informal Sector ◽  
Migrant Workers ◽  
Developed Countries ◽  
Formal Sector ◽  
Entrepreneurship Training ◽  
Business Skills ◽  
Informal Labor ◽  
Middle East Countries

Indonesia is one of the largest suppliers of informal labor in developed countries in ASEAN, Hongkong, Korea, Japan and Middle East Countries. Unlike the formal workforce that has good protection and income certainty. Workers in the non-formal sector still have vulnerabilities to get problems so there are efforts to reduce and prevent more Indonesians from becoming workers in the informal sector. One strategy is to increase the potential of migrant workers not to go abroad and to prevent ex-migrant workers from returning abroad.How to prevent good is to train the former migrant workers by sharing skills so that they can develop their business independently. The training developed is to train entrepreneurial character and practice business skills. Community service is expected to help the program. Community service activities for former migrant workers are conducted in the form of entrepreneurship training. In this activity the participants are former TKI in Sukabumi which amounted to 20 people, conducted in Cibolang Village Gunung Guruh District.

Labour informality may increase in Latin America

2016 ◽  
Keyword(s):  
United States ◽  
Latin America ◽  
Latin American ◽  
Informal Sector ◽  
Labour Productivity ◽  
The United States ◽  
Formal Sector ◽  
Content Type ◽  
Surplus Labour ◽  
Low Levels

Subject The informal sector in Latin America. Significance The scale of informality in Latin American labour markets is widely seen as the main reason for the region's low levels of labour productivity; consequently, policymakers seek ways to induce a transfer of labour towards the formal sector where, in addition, workers come within the tax net. However, in spite of a decade of growth in the region, levels of informality have remained stubbornly high. Impacts A reduction in informality could increase the number of taxpayers and thus revenues. Tighter migration policies in the United States could limit options for surplus labour to relocate elsewhere. Lower birth rates will slow the number of new entrants into the labour market overall.

scholarly journals Agglomeration effects and informal firms in the internal structure of cities

2019 ◽  
Vol 27 (80) ◽  
pp. 93-107
Author(s):  
Andres Dominguez
Keyword(s):  
Developing Countries ◽  
Standard Deviation ◽  
Internal Structure ◽  
Informal Sector ◽  
Local Economy ◽  
Earthquake Risk ◽  
Formal Sector ◽  
Economic Activities ◽  
Standard Deviation Increase ◽  
Content Type

Purpose This paper aims to estimate the effect of agglomeration on the probability of being an informal firm in Cali, Colombia. Informal firms produce legal goods but do not comply with official regulations. This issue is relevant because, similar to other developing countries, the informal sector in Colombia employs more than 50 per cent of the workforce. The results of this study demonstrate that one standard deviation increase in agglomeration reduces by 52 per cent the probability of being informal. Results are consistent with the idea that informal firms benefit less from agglomeration because of legal restrictions that block the relationship with formal firms. Design/methodology/approach The objective of the present paper is to estimate the effect of agglomeration on the probability that a firm – given a location – chooses to be informal. The authors deal with endogeneity issues by using soil information related to earthquake risk, which reduces the height of buildings and therefore increases the cost of agglomeration. The analysis focuses on Cali, Colombia, where the informal sector employs 60 per cent of the workforce. The registration of economic activities is used as a criterion to identify informal firms, in such a way that the percentage of informal firms is 42 per cent. Findings The authors find that the effect of agglomeration is strongly negative. The probability of being informal diminishes by 52 per cent when agglomeration increases by one standard deviation. Results in this paper shed light on how formal firms tend to be localized in high-density commercial and industrial areas, while informal firms are localized in low-density and peripheral areas where the land for production is cheaper and where they can avoid the control of authorities. Originality/value Theory argues that spatial production externalities and commuting costs are among the main forces that shape the city’s internal structure. Externalities include effects that increase firms’ production, and therefore workers’ income, when the size of the local economy grows. The authors now have strong evidence that firms’ productivity is positively related with the volume of nearby employment. Most of the empirical findings concern firms in the formal sector and, accordingly, the literature says little about the effect of agglomeration on informal firms’ location. However, this effect is crucial for developing countries where informal work is the main option for less-educated workers facing unemployment.

scholarly journals Operations sustainability maturity model: preliminary findings of financial services in developing and developed countries

2017 ◽  
Vol 21 (4) ◽  
pp. 309-336 ◽  
Author(s):  
David William Parker ◽  
Alicia Loh ◽  
Delroy Chevers ◽  
Indianna Minto-Coy ◽  
Luca Zeppetella
Keyword(s):  
Financial Services ◽  
Measurement Instrument ◽  
Developed Countries ◽  
Maturity Model ◽  
Structured Interviews ◽  
Data Set ◽  
Content Type ◽  
Services Sector ◽  
Strategic Intent ◽  
Significant Difference

Purpose This paper aims to develop and apply a measurement instrument to identify a comparative metric that identifies operational sustainability maturity across sectors and countries. Design/methodology/approach Using structured interviews to complete the operations sustainability maturity model (OSMM) in financial services organisations, data were compared to show differences for developed and developing countries. Findings The preliminary findings indicate that there is no significant difference in the sustainability maturity index between countries. However, size and profitability are strong indicators of sustainability maturity. Research limitations/implications These findings represent preliminary findings drawn from the financial services sector in a limited number of countries. Expansion of the data set will give greater confidence of results. Practical implications The OSMM is an empirical tool used to collect data that allows statistical evaluation of sustainable strategies used by firms in various sectors and in different countries. Social implications Sustainability is of critical importance in the economic development of all countries. The OSMM embraces fiscal, operational and environmental considerations. The research gives new insights to alternative strategic imperatives. Originality/value With increased awareness of organisational sustainability, academics have developed a number of tools, approaches and strategies to ensure commercial viability. However, few corporations have successfully institutionalised ongoing sustainability. OSMM is unique. Its wider application to embrace additional industry sectors and countries will bring new insight to strategic intent.

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