Methodology for predicting business failure in informal sectors: A proposal based on the notion of thick description

Abstract

This article aims to review the methodology for evaluating economic and financial management to predict business failure in cases involving the informal economy. The notion of "thick description" is suggested, which suggests the need to triangulate different epistemological sources to confirm results in various dimensions, in order to overcome the limitations inherent to informality. With this in mind, a methodological trilemma is created, based on examples from macroeconomics and criminology. Vertex 1 is a descriptive sampling method, with statistical reliability testing, on the microeconomic dimension of the study. Vertex 2 is the expert and user voice, gathering evidence on the relationship between financial informality and financial sustainability as perceived by academia. Vertex 3 is situational, proposing the use of in-depth observation tools such as focus groups to discuss the relationships that can lead to business failure or success. The trilemma is presented to twenty experts to obtain suggestions and recommendations. The model was accepted by the group: a) its benefits in understanding the preventive and/or corrective culture and strengthening its economic and financial management were highlighted, and b) the technical and budgetary complexity of its application was noted.