Informal businesses should be understood as part of entrepreneurial ecosystems, not as economic activity outside them. A 2025 review of 61 peer-reviewed studies finds that informal entrepreneurship is shaped by institutions, social norms, networks, markets, and access to finance. A separate 2026 review is described by its publisher as covering 72 papers, but its full findings and bibliographic details are not verified in the accessible record.
Why informal businesses belong in ecosystem analysis
Entrepreneurial ecosystems are shaped by the conditions that help or constrain businesses: rules, finance, markets, networks, social expectations, and sources of legitimacy. Informal businesses operate within many of those same conditions. Treating them as peripheral can therefore leave out part of how entrepreneurship actually works.
In a 2025 systematic review, Tanya Munir and Sean Watts synthesized 61 peer-reviewed articles published from 2009 through 2023. Their review describes informal entrepreneurship as shaped by ecosystem structures, including policy frameworks, social norms, and cultural practices. It also emphasizes that informal entrepreneurs may draw on both formal and informal networks to find resources, reach markets, and gain legitimacy. Review record Abstract
Why entrepreneurs operate informally
The reviewed literature links informality with institutional voids, regulatory burdens, and limited access to formal financial systems. These are recurring explanations in the scholarship, not a single explanation for every business. A business may face several constraints at once, and the reasons for operating informally can vary by place and circumstance.
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That distinction matters for personal finance and business support: it is misleading to assume informality always reflects a deliberate choice to avoid rules, or that one intervention will address every business’s circumstances. The review points instead to a relationship between entrepreneurs and their surrounding institutional and market conditions. Munir and Watts review abstract
An informal entrepreneurial sub-ecosystem
Munir and Watts identify an emerging idea in the literature: an informal entrepreneurial sub-ecosystem with its own actors, norms, and logic. The concept does not mean informal businesses are isolated from the wider economy. Their networks and practices can connect with formal institutions and markets while also relying on informal relationships and community resources.
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The review says transitions toward formality are influenced by improved governance, targeted support, and coordination across the ecosystem. This is a synthesis of prior scholarship, not evidence that a particular policy pathway will work everywhere. Any proposed support should be assessed against the local rules, financing options, market access, and networks that businesses actually face. Review record
What a Nigeria study illustrates—and what it cannot establish
A 2020 qualitative study by Paul Agu Igwe and colleagues offers a specific example of how these connections can work. The researchers interviewed 20 business owners and held two focus groups with business association leaders in Nigeria. The study’s abstract identifies formal and informal rules, market access, and family as elements supporting knowledge flows, networking, capital, and resource sharing. Publisher abstract
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These interviews and focus groups illustrate themes in that setting; they are not a representative estimate of Nigerian businesses, and they do not establish how common any practice is in Nigeria or elsewhere.
How to compare ecosystem policies or case studies
The 2025 review and the Nigeria study suggest useful questions for examining a policy or local business environment. These are comparison axes drawn from those studies, not a validated universal scoring framework.
- Rules and institutions: What regulatory requirements and institutional conditions shape business activity?
- Finance and markets: Can entrepreneurs access formal finance and reach customers or suppliers?
- Networks and legitimacy: Which formal and informal relationships provide resources, market access, or recognition?
- Culture and community: How do social norms, family, and community resources affect business activity?
- Transitions toward formality: Is there evidence of improved governance, targeted support, and coordination, and how do those measures fit local conditions?
What is established about the 2026 review
An Inderscience publisher search excerpt describes a 2026 systematic review covering 72 papers published from 2009 through 2025 and reports its central argument: informal businesses belong within the larger entrepreneurial ecosystem. The accessible publisher record does not verify the review’s authors, detailed methods, or full findings. The figure of 72 refers to papers in the reported review corpus, not to the number or economic share of informal businesses. Inderscience publisher record
For substantiated detail, the 2025 review provides a broader synthesis of the literature through 2023, while the Nigeria study supplies a geographically bounded qualitative illustration. Neither source establishes the overall scale of informal businesses.
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