Informal born regional enterprises in Ghana: an extension of internationalisation theories

Abstract

Firm internationalisation theories have attempted to explain why, when, where, and how firms engage in cross-border business activity. Yet such research analyses have mainly focused on firms in the formal sector rather than the informal sector. As a step toward filling this gap, we examine the internationalisation degree of informal enterprises using enterprise data collected from 125 randomly selected respondents located in two major clusters in Ghana. With an overall 20 foreign markets served, the informal firms internationalise by capitalising on the cluster resources as joint infrastructure and actor-based perspectives and the linkages between informal and formal sectors, as well as by adopting a stage-wise approach. Additionally, 45% of the firms expand abroad but significantly within Africa from 1 to 3 years after establishment. As such, we introduce the term 'informal born regional enterprises' to the literature of internationalisation, which is synonymous with the 'born regional' argument.