THE INFLUENCE OF LOW-INCOME HOUSEHOLDS: SOCIAL COHESION ENTREPRENEURSHIP FORMALIZATION MODERATED BY FAMILY SUPPORT, RISK PROPENSITY, AND LOCUS OF CONTROL

Poverty is a global problem dating back to the early nineteen hundred. Issues, such as income inequalities, food insecurities, poor education, lack of good health care, and housing challenges haven often been highlighted in research. The plight of low-income households remains an important topic. Prior research shows entrepreneurship as a possible answer, but how could low-income households take advantage of the opportunity that entrepreneurship provides? Researchers have also shown that a high percentage of low-income households engage in informal entrepreneurship because of the low cost of entry. Not all low-income household that are entrepreneurs’ practice in the informal sector. Thus, what are the factors that contribute to low-income households’ participation in the formalization of entrepreneurship? This dissertation empirically investigates the relationship between social cohesion and the degree of entrepreneurship formalization of low-income households. It further studies the moderating variables family support, risk propensity, and locus of control. The findings suggest that social cohesion has a significant impact on the degree of entrepreneurship formalization, but family support and locus of control do not moderate the relationship. However, risk propensity has a significant negative influence on the relationship between social cohesion and the degree of entrepreneurship formalization.