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Informal Business Activity in the Russian Federation: Keep Not Estimate

  • N. L. SimutinaEmail author
  • N. N. Leventov
Conference paper
Part of the Smart Innovation, Systems and Technologies book series (SIST, volume 139)

Abstract

The scientific interest to the research of the entrepreneurship in the informal economy is increasing all over the world but the study of this phenomenon in Russia is only beginning. The paper touches upon the concept of the informal entrepreneurship in the broad and narrow sense. People registered in the state register as sole proprietors and receiving income from their business activity are considered to be informal entrepreneurs. The determinants showing labour demand, labour supply and institutional conditions, which influence the number of such entrepreneurs in the individual regions of the Russian Federation are chosen. The attempt to estimate the impact of some determinants on the number of individual entrepreneurs was made. The dynamical model of panel dataset in which we included the indicators of 77 regions of the Russian Federation for the period of 7 years was used for our calculations. Based on those calculations a number of conclusions was made. The labour demand factors have the most significant effect. Inertness and a traditional character of the kinds of employment in the informal economy of the individual Russian Federation regions is confirmed statistically. The size of the informal sector has a positive effect on people’s ambitions to become informal entrepreneurs. Personal income tax increases, the number of informal entrepreneurs being decreased. As the result, the informal sector expands and informal entrepreneurs pass to work in the formal economy. GDP growth per capita doesn’t stimulate people to be engaged in the informal economy but personal income growth does. Therefore, it might be supposed that individual entrepreneurship in Russia to a great extent free-will but not forced. Low qualified population work in the informal sector without registration as sole proprietors.

Keywords

Informal economy Informal entrepreneurship Sole proprietors Determinants The Russian Federation regions 

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Far Eastern State Agrarian UniversityBlagoveshchenskRussia

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