The driving motives behind informal entrepreneurship: The effects of economic-financial crisis, recession and inequality

Abstract

This study seeks to identify the variables that foster informal entrepreneurship and analyses the effects of the financial crisis and subsequent recession and earnings inequalities within the European context for this type of entrepreneurship. To this end, we made recourse to a diverse range of international databases and, following the application of multiple regression econometric modelling for panel data, we are able to demonstrate how individual sociodemographic characteristics generate a positive effect on informal entrepreneurship. Furthermore, the financial crisis and recession returned a mediating effect between the sociodemographic characteristics and informal entrepreneurship. We thus contribute towards deepening the knowledge in the literature on informal entrepreneurship.