Social innovation at the bottom of the pyramid: Effects of informality and sustainable affordable innovation

Abstract

Until now, the theoretical exploration of informal entrepreneurship's role in driving social innovation has remained largely unaddressed. This study fills this gap by investigating the impact of informal entrepreneurship on social innovation performance through the mediating mechanism of affordable innovation. Using time‐lagged data collected from 264 firms in Vietnam, we find that (1) informal entrepreneurship positively relates to affordable innovation, (2) affordable innovation mediates the relationship between informal entrepreneurship and social innovation performance, and (3) bottom‐of‐the‐pyramid orientation bolsters the relationship between affordable innovation and social innovation performance. These findings contribute to advancing both informal entrepreneurship and social innovation literature.