BEYOND THE MARGINALIZATION THESIS: AN EVALUATION OF THE PREVALENCE, CHARACTER AND MOTIVES OF INFORMAL SECTOR ENTREPRENEURS IN KOSOVO

Abstract

The conventional depiction of the prevalence, character and motives of informal sector entrepreneurs, here termed the ‘marginalization thesis,’ has been that informal entrepreneurs are a small, insignificant minority of all entrepreneurs, are more likely than formal entrepreneurs to belong to marginalized groups and are more likely to be necessity-driven entrepreneurs. To evaluate critically this marginalization thesis, evidence is here reported from a 2017 survey of entrepreneurs in Kosovo. This reveals that 42.5 percent of entrepreneurs are informal entrepreneurs, that only some characteristics of marginalized populations are more prominent among informal than formal entrepreneurs (e.g., low educational level, deprived households) but others are not significantly associated (e.g., gender, age, ethnicity), and that although informal entrepreneurs are more likely than formal entrepreneurs to be necessity-driven, only fourteen percent of informal entrepreneurs are purely necessity-driven. The outcome is a call to recognize the prevalence of informal sector entrepreneurship, the heterogeneous groups engaged in informal entrepreneurship and the existence of opportunity-drivers among informal entrepreneurs. The theoretical and policy implications are then discussed.