ABSTRACT
This chapter evaluates whether there is a significant association between the prevalence of informal entrepreneurship and institutional asymmetry and, secondly, identifies the formal institutional failures that are associated with the greater prevalence of informal entrepreneurship. It briefly reviews both the emergent institutional theory along with the competing theories regarding which formal institutional failures are associated with higher levels of informal entrepreneurship. The chapter then reports the data and methodology used to test these hypotheses regarding the determinants of informal entrepreneurship, namely WBES data from 142 countries collected between 2006 and 2014 on the extent to which formal firms identify that they are competing with unregistered or informal competitors and the multivariate regression analysis methodology. Entrepreneurs operating in the informal sector, such as street hawkers, were consequently represented as a leftover from an earlier pre-modern mode of production and disappearing as they became incorporated into the modern formal sector.
