Ecosystems beyond the formal: a systematic literature review of informal entrepreneurship and its ecosystemic dynamics

Purpose This study aims to systematically explore the intersection between informal entrepreneurship (IE) and entrepreneurial ecosystems (EE), with a particular focus on how structural elements, institutional contexts and network dynamics shape the emergence, functioning and formalization of informal enterprises. Despite the growing interest in both IE and EE, their interrelationship remains under-researched, especially in terms of how entrepreneurs navigate within and across formal and informal systems. Design/methodology/approach The systematic literature review study synthesizes insights from 61 peer-reviewed journals (Scopus and Web of Science) published between 2009 and 2023. Findings The review reveals that informal entrepreneurship is deeply embedded in and influenced by structural elements of EEs – particularly policy frameworks, social norms and cultural practices. Institutional voids, regulatory burdens and lack of access to formal financial systems are common drivers of informality. However, informal entrepreneurs actively engage with both formal and informal networks to access resources, markets and legitimacy. A growing body of literature points to the existence of an “informal entrepreneurial sub-ecosystem” with its own actors, norms and logic of action. The transition toward formality is shaped by multiple factors, including improved governance, targeted support mechanisms and ecosystem-level coordination among stakeholders. Originality/value This review contributes to the evolving discourse by bridging two relatively siloed research domains – informal entrepreneurship and entrepreneurial ecosystems. It provides a conceptual foundation for future empirical work and policy design, emphasizing the need for ecosystem-based approaches in understanding and supporting informal entrepreneurial activity.