Enterprise Survival and Growth: Classification, Structures, and Policy Development in Nigeria.

Research on Informal Economy (IE) has advanced over recent years and gained increasing popularity. Despite this interest, there is a dearth of research exploring the institutionalisation of Informal Economy Entrepreneurs (IEEs), particularly enterprises in Sub-Saharan Africa (SSA), and implications for the institutional environment. This research begins to address the deficit by conceptualising the establishment of Nano Enterprise (NE) business classification as an enabler for the institutionalisation of IE enterprises in SSA. Institutionalisation should eliminate barriers to access resources in the formal economy (FE) as survival and growth of IE enterprises is inherently challenging as informality creates resource-constraints. Using quantitative methods, the study used logit and ordered logit regression analysis to analyse survey data from 398 Nigerian entrepreneurs selected through purposive regional cluster sampling to theorise the interconnected impact of key formal institutions on the choice of venture creation in the IE. The study finds non-registration precludes IEEs future access to resources from formal institutions for survival and growth. Contrary to the counterproductive labels in extant literature, business registration was found to be pivotal for access to otherwise constrained resources for survival and growth of IEEs. Furthermore, the study finds positive and significant relationship between informality and support for the establishment of NE classification for nonemploying entrepreneurs conceptualised as an enabler for institutionalising IE enterprises. The study further provides empirical evidence that informality is positively and significantly related to the willingness of IEEs to register under NE business classification. In addition, specific government policies targeting non-employing entrepreneurs and access to government financial incentives were found to have significant effect on the willingness of IEEs to register under the proposed business classification. These findings provide important implications for academic conceptualisation of the IE, entrepreneurship as practice, and policy development for enterprise survival and growth in developing countries such as Nigeria.