Is the informal economy an incubator for new enterprise creation?

What is it about?

This paper examines whether men and women starting a business use the informal economy and do so to test the viability of their venture.

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Why is it important?

Of the 22 percent of men and 13 percent of women small business owners reporting that they traded informally when starting their business, 66 per cent of the men and 53 percent of the women assert that a main reason was to test the viability of their business. Hence, just over 1 in 6 small businesses started by men and 1 in 14 started by women (1 in 8 overall) traded in the informal economyinformally when starting up in order to test the viability of the business.

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