Firm Structure, Market Structure, and Firm Dynamics of the Informal Sector in India: A Survey of Literature

Abstract

Despite the expected dissolution of the informal sector with growth, the ongoing emergence and expansion of this sector, especially in developing countries like India, has raised a vibrant theoretical and empirical discussion. This paper aims to survey the vast existing literature on the informal sector in India, focusing on sectoral and intra-sectoral aspects such as firm structure, market structure, and firm dynamics. From the literature, we could identify that competition, or lack of it, happens to be a crucial issue in analyzing the above-mentioned aspects. Contrary to this emphasis on the competition by both the orthodox and heterodox discourses, we try to identify the role of intra and extra-firm collaboration in the context of firm structure, market structure, and firm dynamics. However, the role of collaboration in these aspects is largely under-researched in the existing literature and thus could be a potential scope of future research in the informal sector.