Imitation, entrepreneurship and the informal/formal economy nexus: an African perspective

This paper explores a segmentation of micro and small enterprises (MSEs) in developing countries within the formal/informal economy nexus that has wide-ranging implications for the targeting of base-of-the-pyramid initiatives and entrepreneurship theory. This proposed segmentation emerges from the analysis of a sample of Kenyan MSEs utilising current and prior business models; the antecedent influences shaping the business model; barriers to entry associated with knowledge, capital and skills; the degree of innovation or imitation evident in the business model linked to the nature of opportunity recognition; and their relationship with the formal institutional business environment.

Building dynamic capabilities of adaptation and innovation: a study of micro-foundations in a transition economy

What are the microfoundations of dynamic capabilities that sustain competitive advantage in a highly volatile environment, such as a transition economy? We explore the detailed nature of these dynamic capabilities along with their antecedents by tracing the sequence of their development based on a longitudinal case study of an organization subject to an external context of radical transition — the Russian oil company, Yukos. Our rich qualitative data indicate two distinct types of dynamic capabilities that are pivotal for organizational transformation. Adaptation dynamic capabilities relate to routines of resource exploitation and deployment, which are supported by acquisition, internalization and dissemination of extant knowledge, as well as resource reconfiguration, divestment and integration. Innovation dynamic capabilities relate to the creation of completely new capabilities via exploration and path-creation processes, which are supported by search, experimentation and risk taking, as well as project selection, funding and implementation. Second, we find that sequencing the two types of dynamic capabilities, helped the organization both to secure short-term competitive advantage, and to create the basis for long-term competitive advantage. These dynamic capability constructs advance theoretical understanding of what dynamic capabilities are, whilst their sequencing explains how firms create, leverage and enhance them over time.

Clusters, connectivity and catch-up: Bollywood and Bangalore in the Global Economy

In this article, we make two important contributions to the literature on clusters. First, we provide a broader theory of cluster connectivity that has hitherto focused on organization-based pipelines and MNE subsidiaries, by including linkages in the form of personal relationships. Second, we use the lens of social network theory to derive a number of testable propositions. We propose that global linkages with decentralized network structures have the highest potential for local spillovers. In the emerging economy context, our theory implies that clusters linked to the global economy by decentralized pipelines have potential for in-depth catch-up, focused in industry and technology scope. In contrast, clusters linked through decentralized personal relationships have potential for in-breadth catch-up over a range of related industries and technologies. We illustrate our theoretical propositions by contrasting two emerging economy case studies: Bollywood, the Indian filmed entertainment cluster in Mumbai and the Indian software cluster in Bangalore.

Embedding arts and humanities in the creative economy: the role of graduates in the UK

The recent change in funding structure in the UK higher education system has fuelled an animated debate about the role that arts and humanities (A&H) subjects play not only within higher education but more broadly in the society and the economy. The debate has engaged with a variety of arguments and perspectives, from the intrinsic value of A&H, to their contribution to the broader society and their economic impact, particularly in relation to the creative economy, through knowledge exchange activities. The paper argues that in the current debate very little attention has been placed on the role that A&H graduates play in the economy, through their work after graduation, and specifically in the creative economy. Using Higher Education Statistical Agency data, we analyse the performance of A&H graduates (compared with other graduates) and particularly explore how embedded they are with the creative economy and its associated industries. The results highlight a complex intersection of different subdisciplines of the A&H with the creative economy but also reveal the salary gap and unstable working conditions experienced by graduates in this field.

Reaching the underbanked and unbanked in subsistence markets at the nexus of the formal and informal economy

It is estimated that globally over 2 billion people do not have a bank account, with many more in the developed and developing worlds ‘under-banked’, meaning they have limited access to financial services. Reaching the unbanked and underbanked with appropriate financial services is widely recognised as critical for future global economic growth and prosperity. Drawing upon multidimensional understandings of poverty, and framed by literature on poverty pools, traps and cycles, this paper explores the use of financial products and services in the developing world and critically reflects on their potential role in poverty alleviation and wider sustainable development. Discussions are illustrated with reference to qualitative empirical research undertaken in East and Southern Africa, and a sense-making of the lived financial experiences of low income individuals, households and communities.

Money laundering and the shadow economy in Kazakhstan

Purpose The purpose of this paper is to assess and highlight the approach taken towards the legal control of illicit money laundering taken in the Republic of Kazakhstan, in particular, the role played by an amnesty on the legalisation of illicit funds. This is particularly important as a basis for a wider discussion about the proper limits of the “criminalising” approaches commonly taken in anti-money laundering regulations. Design/methodology/approach The discussion and evaluation in the paper is based upon a conceptual analysis of the money laundering regime in Kazakhstan, in particular, the legal framework and policies of implementation adopted. Findings The paper demonstrates that the problems that are posed by the shadow economy in post-Soviet transition societies can make the blanket criminalisation of money laundering a self-defeating approach, unless accompanied by measures which allow for the achievement of “market-constituting” effects. Research limitations/implications The paper draws on experience and practice in one jurisdiction only (Kazakhstan); it also limits its focus to one particular example of a money laundering amnesty policy. Both of these limitations, therefore, suggest avenues for further comparative research. Originality/value The paper’s conclusions about the interactions between the shadow economies of transitional societies and the global anti-money laundering agenda have wider application in assessments of international law in this area.

The viability of sustained growth by India’s MNEs: India’s dual economy and constraints from location assets

This paper considers the longer-term viability of the internationalization and success of Indian multinational enterprises (MNEs). We apply the ‘dual economy’ concept (Lewis, Manch Sch 22(2):139–191, 1954) to reconcile the contradictions of the typical emerging economy, where a ‘modern’ knowledge-intensive economy exists alongside a ‘traditional’ resource-intensive economy. Each type of economy generates firms with different types of ownership advantages, and hence different types of MNEs and internationalisation patterns. We also highlight the vulnerabilities of a growth-by-acquisitions approach. The potential for Indian MNEs to grow requires an understanding of India’s dual economy and the constraints from the home country’s location advantages, particularly those in its knowledge infrastructure.