Informal Entrepreneurship and Past Experience in an Emerging Economy

Abstract

Informal economies account for up to 70 per cent of GDP in developing countries, but few studies have explored informal entrepreneurship. To fill this gap, an exploratory study involving 855 university students in an emerging economy applies the Theory of Planned Behaviour (TPB) to study the cognitive process of informal entrepreneurship. The effect of past experience (PE) and necessity entrepreneurship on the intention to start a business is also explored. Our findings provide evidence that the decision to start a business in the informal economy reinforces the effect of subjective norms on entrepreneurial intentions (EIs). Implications for education programmes and for theory are discussed.