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Abstract

In this dissertation, I examine how markets, livelihoods, and industries emerge, grow, and persist in contexts often described in the literature as institutional voids. Research in management has long emphasized the role of formal institutions in sustaining markets, livelihoods, and industries by enabling coordination, reducing uncertainty, and supporting durable forms of exchange, work, and collective growth. In contexts where these institutions are weak, absent, or disrupted, scholars have accordingly examined how actors behave and organize under such conditions. Much of this work has focused on circumvention, adaptation, and coping, often at the micro level and over relatively short time horizons. By contrast, this dissertation examines processes that unfold at a larger scale and over longer periods of time, focusing on how economic activity becomes organized and sustained at the level of markets (Chapter 2), industries (Chapter 4), and individual livelihoods (Chapter 3). In doing so, it shifts attention from isolated responses to institutional voids toward the broader question of how growth and continuity become possible under such conditions.

The second chapter examines the growth of Lebanon’s informal currency market following the October 2019 financial crisis. Prior research often suggests that informal markets struggle to grow sustainably because increasing visibility exposes them to regulation, enforcement, and shutdown. Yet this view rests largely on assumptions derived from contexts in which formal institutions retain both the capacity and the willingness to enforce against informal market expansion. In many Global South settings, however, formal institutions may be weakened and disrupted or may in the first place lack the willingness to meaningfully enforce against informal markets, fundamentally reshaping how such informal markets evolve and grow. Drawing on 60 interviews with informal traders and other actors, fieldwork, and archival data, we examine how Lebanon’s informal currency market developed as a collective and organized phenomenon. We argue that this growth was enabled by the ongoing embedding of residual formal actors, that is, actors linked to the remnants of previously dominant formal financial institutions who, despite weakened authority and legitimacy, continue to shape market dynamics. We identify three mechanisms through which informal traders and residual formal actors resolved core coordination problems of value, competition, and cooperation: the formation of informal elites, the adoption of binding market practices, and the negotiation of role boundaries. The paper contributes by conceptualizing informal markets as organized social systems and showing that their sustained growth relies on the co-presence of informal and residual formal actors.¹

The third chapter zooms in on the livelihoods of the informal traders examined in Chapter 2 and asks how individuals move from previously formal positions into informal economic activity, and how such participation becomes justified and sustained over time. Research on informal entrepreneurship has focused primarily on processes of formalization, leaving the reverse trajectory—informalization—underexplored. Adopting a “localized” lens, we examine how entrepreneurs move into informal economic activity and how multi-level conditions come to support remaining in that space. Focusing on Lebanon’s informal parallel currency market following the country’s 2019 financial collapse, we draw on 60 interviews with informal currency traders and other actors, fieldwork, and longitudinal archival and social media data consisting of 16,290 newspaper articles and 10,872 tweets. We develop a process model of crisis-driven informalization. Informal trading initially emerges as a way to shelter the fallout of crisis amid failing formal employment, payroll, banking, and monetary systems. Over time, continued participation becomes stabilized through four reinforcing dynamics: upward class mobility, growing societal dependence on traders to sustain everyday transactions, public pardoning of informal exchange at the societal level as crisis conditions persist. Together, these dynamics culminate in dignity restoration within family and community relationships, transforming informal trading from a reluctant coping strategy into a sustained livelihood that actors could no longer secure through the formal sector. This paper contributes to research on informal entrepreneurship by theorizing informalization as a localized process shaped by material necessity, social re-evaluation, and shifting moral boundaries under conditions of institutional breakdown.²

The fourth chapter examines how industries grow in contexts where general-market and industry-specific institutions are weak, absent, or non-functional. Such institutions are widely seen as crucial for industry growth because they reduce uncertainty, help coordinate exchange, enable quality control, and facilitate access to finance. But what happens when these institutional supports are missing? We examine this question through the rapid expansion of Lebanon’s solar industry following the country’s 2019 financial and energy crisis, an extreme context marked by institutional collapse. Drawing on 50 interviews, fieldwork, and 190 archival documents, we show that industry growth in such settings does not depend on the presence of these institutions, but instead becomes organized through the collective action of heterogeneous actors who actively circumvent their absence. We identify three core mechanisms enabling this growth. First, relational screening governed participation in the absence of robust regulatory and certification systems by relying on reputation, trust, and exclusion. Second, material screening disciplined providers where quality standards and monitoring mechanisms were weak, using the observable performance and failure of solar systems in use. Third, alternative financing enabled transactions despite dysfunctional formal banking and credit systems, mobilizing liquidity and payment arrangements outside conventional financial channels. Together, these mechanisms explain how industry growth became possible despite the weakness of the institutional arrangements typically assumed to support it.³

¹ This paper is co-authored with Aulia Syakhroza and is currently under review at Organization Science.
² This paper is co-authored with Theodore Khoury at Portland State University and has been accepted for the Special Issue Workshop on Entrepreneurship in the MENA Region at *Small Business Economics*, and it has also been invited for presentation at the IREC conference as part of the PDW. We plan to submit the paper to the special issue later this year. Prior to that, the paper was presented at various venues, including Portland State University, the University of Oregon, the University of Helsinki, the Strategy Science Conference, and others.
³ This paper is co-authored with Mara Guerra and has been presented at various venues, including the Strategy Science Conference, the Academy of Management Annual Meeting, the Organization Science Winter Conference, and several others.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School > Bayes Business School Doctoral Theses Bayes Business School > Faculty of Management Doctoral Theses

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