This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Endogenous Business Networks

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Kali, Raja
Abstract

Business networks are a feature of the organizational landscape of many countries, though they vary in magnitude. This article develops a theory of business networks where they are endogenous to the reliability of the legal system. Networks are a substitute for reliable institutional support that guarantees written contracts. The existence of networks exerts a negative effect on the functioning of the anonymous market. This is because the network absorbs honest individuals, raising the density of dishonest individuals engaged in anonymous market exchange. Since this lowers the payoff from market exchange, larger networks may be easier to enforce. We find that networks are economically inefficient unless they are relatively large. This is consistent with the view that informal contract enforcement institutions may be inefficient in general equilibrium even though they enhance efficiency in partial equilibrium. Copyright 1999 by Oxford University Press.

Download Info
To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Publisher Info
Article provided by Oxford University Press in its journal Journal of Law, Economics and Organization.

Volume (Year): 15 (1999)
Issue (Month): 3 (October)
Pages: 615-36
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:oup:jleorg:v:15:y:1999:i:3:p:615-36

Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Email:
Web page: http://jleo.oupjournals.org/

Order Information:
Web: http://www.oup.co.uk/journals

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
  1. Christa Hainz, 2006. "Business Groups in Emerging Markets-Financial Control & Sequential Investment," William Davidson Institute Working Papers Series wp830, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  2. Felipe Balmaceda, 2005. "Cooperation and Network Formation," Documentos de Trabajo 205, Centro de Economía Aplicada, Universidad de Chile. [Downloadable!]
  3. Bikram De, 2008. "The Incidence and Performance Effects of Interlocking Directorates in Emerging Market Business Groups: Evidence from India," Working Papers id:1770, esocialsciences.com. [Downloadable!]
  4. Hainz, Christa, 2004. "Business Groups in Emerging Markets - Substitutes for Missing Institutions," Discussion Papers in Economics 387, University of Munich, Department of Economics. [Downloadable!]
  5. William Pyle, 2003. "Reputation Flows: Contractual Disputes and the Channels for Inter-firm Communication," William Davidson Institute Working Papers Series 2003-633, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  6. Bikram De, 2003. "Incidence and performance effects of interlocking directorates in emerging market business groups: Evidence from India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2003-001, Indira Gandhi Institute of Development Research, Mumbai, India. [Downloadable!]
  7. Christa Hainz, 2006. "Business Groups in Emerging Markets – Financial Control and Sequential Investment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Matthieu Chemin, 2007. "Does Judicial Quality Shape Economic Activity? Evidence from a Judicial Reform in India," Cahiers de recherche 0725, CIRPEE. [Downloadable!]
  9. Marcel Fafchamps, 2003. "Spontaneous Market Emergence," Economics Series Working Papers 138, University of Oxford, Department of Economics. [Downloadable!]
  10. Felipe Balmaceda, 2004. "Network Formation and Cooperation," Econometric Society 2004 Latin American Meetings 208, Econometric Society. [Downloadable!]
  11. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Agricultural Transition - Theory And Evidence From Poland," 2003 Annual meeting, July 27-30, Montreal, Canada 22213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  12. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Transition Agriculture: Theory And Evidence From Poland," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25878, International Association of Agricultural Economists. [Downloadable!]
    Other versions:
  13. Rafael Rob & Huanxing Yang, 2006. "Long Term Relationships as Safeguards," Levine's Working Paper Archive 618897000000001039, David K. Levine. [Downloadable!]
  14. repec:bep:thetop:v:7:y:2007:i:1:p:1353-1353 is not listed on IDEAS
  15. Matthieu Chemin, 2007. "The Impact of the Judiciary on Economic Activity," Cahiers de recherche 0724, CIRPEE. [Downloadable!]
  16. Oluwarotimi Owolabi & Sarmistha Pal, 2009. "The Value of Business Networks; an Analysis of Firm Financing in Transition Economies," CEDI Discussion Paper Series 09-01, Centre for Economic Development and Institutions(CEDI), Brunel University. [Downloadable!]
  17. Haselmann, Rainer & Pistor, Katharina & Vig, Vikrant, 2006. "How Law Affects Lending," MPRA Paper 157, University Library of Munich, Germany. [Downloadable!]
Statistics
Access and download statistics

Did you know? RePEc also has a blog.

This page was last updated on 2009-11-19.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.