An Exploration into the Nature of Informal—Formal Sector Relationships

Informal self-employment and macroeconomic fluctuations

“…See, for example, Boeri and Garibaldi (2006). 2 For early statements, see Sethuraman (1981), Tokman (1978), and Mazumdar (1975), respectively. 3 See for more recent formulations in this vein, de Soto (1989), Loayza (1996) and Maloney (1999).…”

Entrepreneurial activity in the informal economy: a missing piece of the entrepreneurship jigsaw puzzle

“…Bangasser (2000) reviews the history of the concept within the ILO, while in a special issue of World Development Bromley (1978) assembles now classic papers on the informal sector in developing countries, amongst them the reviews by Moser (1978) and Tokman (1978). 4.…”

Determinants and impacts of subcontracting: evidence from India’s unorganized manufacturing sector

“…This finding is consistent with a competing theoretical perspective that views subcontracting as harmful to micro and small enterprises in the informal sector. According to this view, subcontracting linkage is an exploitative relationship, where large firms extract surplus from smaller subcontracted firms due to asymmetric bargaining power over input and output prices, reinforcing stagnation in subcontracted firms (Moser 1978;Tokman 1978;Portes and Walton 1981;NCEUS 2007). Formal sector firms will subcontract the labour-intensive parts of the production process to the informal enterprises as a cost-cutting measure in the face of stiff competition in the markets for formal sector output.…”

“…This leads to surplus extraction and reinforces stagnation in the informal sector (Moser 1978;Tokman 1978;Portes and Walton 1981;NCEUS 2007). Thus, subcontracting is largely about cost-cutting by large formal sector firms (Mehrotra and Biggeri 2002).…”