Tying Strong Ties in Informal Entrepreneurship: A Constraint or an Entrepreneurial Driver?

Abstract

Informal entrepreneurship is a persistent and extensive phenomenon in both developed and developing countries and considerable efforts have been made to understand it from an ecosystem perspective. Nevertheless, literature that analyzes networks within and among individuals in the informal economic sector has received less attention. This study presents an interesting extension of Granovetter's “strength of weak ties” hypothesis. Until now, strong ties are perceived to be constraining and less beneficial than weak ties for the entrepreneurial activity. However, this paper critically examines this assumption in the context of informal entrepreneurship to explore in detail this networking dynamic and how it affects their financial and social performance. A qualitative approach using 50 face-to-face interviews in Mexico was conducted. Our findings demonstrate that strong ties provide the resources, support and information informal entrepreneurs need to reduce their adversity and vulnerable conditions, having a positive impact on their financial and social outcomes.

Systematic Literature Review on Ethnic Minority Entrepreneurship: Citation and Thematic Analysis

“…Thus, a possibility exists for losing information and support that external agencies could provide. Therefore, strong ties are considered as inefficient capital for business developments (Villanueva et al, 2018). As per Waldinger et al (1990), for ethnic business developments, ethnic entrepreneurs must have pertinent information on modern industrial patterns, processes, conceivable business locations, and the market's economic situation.…”

Evaluating Theorizations of Informal Sector Entrepreneurship: Some Lessons From Zamfara, Nigeria

“…In recent decades, the field of entrepreneurship has witnessed the growth of a burgeoning literature on informal sector entrepreneurship that has challenged the long-standing idealtype portrayal of entrepreneurs as super heroes by bring to attention the lived practice of entrepreneurship (Bigsten et al, 2000;Cross, 2000;Das, 2003;Gurtoo and Williams, 2009;House, 1984;Khan, 2018;Mukorera, 2019;Simon, 1998;Skinner, 2005;Tamkin 2009;Villanueva et al, 2018;Williams, 2013Williams, , 2015Williams, , 2018Williams and Gurtoo, 2011;Kedir, 2016, 2017;Williams, et al, , 2016aWilliams, et al, ,b, 2017Zuin, 2004). To explain this entrepreneurship in the informal sector, various competing theories have emerged.…”

The Impact of Digitalisation and Entrepreneurial Networks on Business Strategy Development— a media richness theory approach

“…This looseness may result from the short duration of the relationship, infrequent interaction, or a personal feeling of a lack of closeness [51]. In strong ties, there are frequent interactions between parties, and such interactions are often based on a high degree of mutual trust [52]. Meanwhile, weak ties involve low levels of trust and reciprocity [42].…”

“…They comprise various parts of the social system which are not easily defined. Weak ties are important for entrepreneurial activities [52] as through these ties, entrepreneurs and businesses are more likely to be able to access diffuse information [59]. Weak ties provide accessibility to rich resources information as they offer connections to divergent branches of the network [57].…”