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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

The shadow economy has become the focus of policy makers around the world. This timely book explores the relationship between entrepreneurship and the shadow economy by reviewing how to measure, explain and tackle this hidden enterprise culture. The editors bring together leading authorities in the field to examine existing methods to measure the shadow economy, explore entrepreneurship and shadow economy practices in various contexts, and provide policy suggestions for decreasing the shadow economy. It concludes by encouraging further research in this ever-growing field.
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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Colin C. Williams, Ioana A. Horodnic and Jan Windebank

The aim of this chapter is to evaluate which groups of the self-employed engage in the shadow economy. Until now, self-employed people participating in the shadow economy have been predominantly viewed as marginalized populations such as those on a lower income and living in deprived regions (the ‘marginalization thesis’). However, an alternative emergent ‘reinforcement thesis’ conversely views these marginalized self-employed as less likely to do so. Until now, no known studies have evaluated these competing perspectives. To do this, we report a 2013 survey conducted across 28 countries involving 1969 face-to-face interviews with the self-employed about their participation in the shadow economy. Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalization thesis applies when analysing characteristics such as the age, marital status, tax morality, occupation and household financial circumstances of the self-employed engaged in the shadow economy. However, when gender and regional variations are analysed, the reinforcement thesis is valid. When characteristics such as the urban–rural divide and educational level are analysed, no evidence is found to support either the marginalization or reinforcement thesis. The outcome is a call for a more nuanced understanding of the marginalization thesis that the self-employed participating in the shadow economy are largely marginalized populations.
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Edited by Arnis Sauka, Friedrich Schneider and Colin C. Williams

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Entrepreneurship and deprived urban areas: understanding activity and the hidden enterprise culture

Towards an Understanding of the Economies of Neighbourhoods and Communities

Nick Williams and Colin Williams

The aim of the chapter is to evaluate how entrepreneurial activity is influenced by the individual and area characteristics through a focus on deprived residential urban areas. Although barriers commonly associated with entrepreneurship are not exclusively faced by entrepreneurs in deprived areas, they are likely to be more acute than in relatively affluent areas. We demonstrate the importance of understanding the socio-spatial contingency of entrepreneurship, meaning that entrepreneurial activity is influenced by the social and spatial context in which it occurs. Often entrepreneurial activity in deprived urban areas will be small in scale, with individuals entering trades with low entry barriers and with finite and highly localised demand. This presents a challenge for policymakers as supporting these businesses may simply result in other existing businesses which are not supported failing, resulting in no net gain for the area. In addition, despite the numerous barriers to entrepreneurship present in deprived areas, they do not lack entrepreneurial activity per se. Instead, the chapter shows that a ‘hidden enterprise culture’ exists, with entrepreneurs in deprived areas more likely to engage in entrepreneurship in the informal economy, which we define as activities that are legitimate in all respects besides the fact that they are unregistered by, or hidden from, the state for tax or benefits purposes. The chapter concludes by providing a number of policy implications for fostering entrepreneurship in deprived urban areas.

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  • Elgar original reference

Colin C. Williams and Jan Windebank