Abstract
We offer a behavioural framework to explain informal firms’ decision to formalize. We argue that aspirations for which firms skirt formal regulation to operate in the informal economy serve as reference points in interpreting and evaluating the prospect of formalization. We differentiate between the influences of firms expected performance relative to aspired performance and the influence of different form of aspiration being pursued (aspirations related to subsistence, exploitation, legacy, and resistance). In conclusion, we contribute to extant research emphasizing formalization as a quasi-rational calculation by recognizing how formalization can be seen as a complex decisions-making process surrounded by severe information incompleteness and uncertainty.
| Original language | English |
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| Title of host publication | Proceedings of the Eightieth Annual Meeting of the Academy of Management |
| Editors | Guclu Atinc |
| Number of pages | 1 |
| Place of Publication | Briarcliff Manor, NY |
| Publisher | Academy of Management |
| Publication date | 2020 |
| DOIs | |
| Publication status | Published - 2020 |
| Event | The Academy of Management Annual Meeting 2020: Broadening Our Sight - Virtual Duration: 7 Aug 2020 → 11 Aug 2020 Conference number: 80 https://aom.org/events/annual-meeting/past-annual-meetings/2020-broadening-our-sight |
Conference
| Conference | The Academy of Management Annual Meeting 2020 |
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| Number | 80 |
| Location | Virtual |
| Period | 07/08/2020 → 11/08/2020 |
| Internet address |
| Series | Journal of International Business Studies |
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| ISSN | 0047-2506 |