Value of Formalization for Women Entrepreneurs in Developing Contexts: A Review and Research Agenda

Thursday, 7 December, 2017
Formalization is constantly being proposed as being of great benefit to business expansion and success. This claim, however, has not been previously tested through a review of the empirical evidence, especially in relation to the large number of women in the developing world that operate in the informal economy. Therefore, the aim of this review (2017) by Xheneti, Madden and Thapa Karki, published in the International Journal of Management Reviews, is to systematize the current empirical evidence on gender, the informal economy and formalization, using a narrative synthesis of 76 papers. The papers were analysed along three main analytical themes – identity, institutions, and constraints and preferences – highlighting their conceptualization in studies of different academic disciplines – economics, sociology, entrepreneurship and development. The review calls for more accurate accounts of formalization decisions by widening the lens through which formalization decisions are conceptualized. These should take account of the rich contextual and temporal dimensions central to these decisions, and recognize that gender alone is not a sufficient factor in explaining women’s choices in the informal economy. The review also highlights limitations in relation to the limited conceptual and empirical evidence on which development priorities such as formalization are set. The authors propose a research agenda centred on the need for conceptual frameworks that are more sensitive towards the multidimensional contexts of women’s choices.