Small businesses performance in West African border regions: Do social networks pay off?
AbstractThis paper studies the link between economic performance and social networks in West Africa. Using first-hand data collected on 358 small-scale traders in five border markets between Niger, Nigeria and Benin, we are particularly interested in testing whether the most well-connected actors of trade networks are also the most successful in terms of monthly sales and profit. The paper shows that the overall economic performance of traders is affected by the socio-professional position of the actors with whom they are connected. While social ties with local religious leaders have no effect on their business, support received from civil servants, politicians, and security authorities translates into economic performance. The paper also shows significant differences between countries, regions and marketplaces. Social connections developed with state representatives have a much greater effect on economic performances in Niger and Benin than in Nigeria, where average profit is much higher. Experience is more closely correlated with profit in the region where traders have developed re-export trade activities than where petty trade is the dominant form of business.
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Bibliographic InfoPaper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2014-06.
Length: 28 pages
Date of creation: May 2014
Date of revision:
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Social networks; border markets; economic performance; Benin; Niger; Nigeria;
Find related papers by JEL classification:
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-05-24 (All new papers)
- NEP-CSE-2014-05-24 (Economics of Strategic Management)
- NEP-SOC-2014-05-24 (Social Norms & Social Capital)
- NEP-URE-2014-05-24 (Urban & Real Estate Economics)
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