Advanced Search
MyIDEAS: Login to save this paper or follow this series

Informal-formal Linkages and Informal Enterprise Performance in Urban West Africa

Contents:

Author Info

  • Marcus Böhme, Rainer Thiele

Abstract

Employing a unique dataset that covers almost 6000 informal enterprises from six West African urban centers, this paper examines the backward and forward linkages of these enterprises to the formal sector. We first provide a descriptive analysis of the existing formal-informal linkages. It turns out that formal backward linkages are much more prevalent than formal forward linkages, and that linkages vary with the degree of informality, occurring less frequently if firms have no ties to the formal sector at all or low capital stocks. In the second step, we employ a Probit approach to identify major factors associated with the observed backward linkages. The Probit analysis corroborates the importance of the degree of informality for the existence of linkages and shows various enterprise characteristics to be significant determinants as well. Finally, we analyze whether backward linkages matter for enterprise performance using both OLS and IV estimations. We find a positive and robust impact of backward linkages, whereas the degree of informality of the enterprises in our sample seems to affect firm performance only indirectly through their linkages to the formal sector

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: https://www.ifw-members.ifw-kiel.de/publications/informal-formal-linkages-and-informal-enterprise-performance-in-urban-west-africa/KWP_1751.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1751.

as in new window
Length: 24 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:kie:kieliw:1751

Contact details of provider:
Postal: Kiellinie 66, D-24105 Kiel
Phone: +49 431 8814-1
Fax: +49 431 85853
Email:
Web page: http://www.ifw-kiel.de
More information through EDIRC

Related research

Keywords: Informal sector; formal-informal linkages; enterprise performance; West Africa;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Jose Scheinkman & Aureo de Paula, 2007. "The Informal Sector," 2007 Meeting Papers, Society for Economic Dynamics 117, Society for Economic Dynamics.
  2. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, American Economic Association, vol. 61(2), pages 112-23, May.
  3. Rafael La Porta & Andrei Shleifer, 2014. "The Unofficial Economy in Africa," NBER Chapters, National Bureau of Economic Research, Inc, in: African Successes: Government and Institutions National Bureau of Economic Research, Inc.
  4. Barry Reilly & Gorana Krstic & Matteo Cominetta, 2006. "Purchasing from Informal Markets: Evidence from Serbia," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 52(3), pages 30-50.
  5. Aureo de Paula & Jose A. Scheinkman, 2007. "The Informal Sector, Second Version," PIER Working Paper Archive, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania 07-035, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 17 Oct 2007.
  6. Ciccone, Antonio, 2002. "Input Chains and Industrialization," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(3), pages 565-87, July.
  7. Marcus Böhme & Rainer Thiele, 2011. "Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals," Kiel Working Papers, Kiel Institute for the World Economy 1683, Kiel Institute for the World Economy.
  8. Fortin, Bernard & Lacroix, Guy & Montmarquette, Claude, 2000. "Are Underground Workers More Likely to be Underground Consumers?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(466), pages 838-60, October.
  9. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0118, National Bureau of Economic Research, Inc.
  10. Grimm, Michael & Kruger, Jens & Lay, Jann, 2011. "Barriers to entry and returns to capital in informal activities : evidence from Sub-Saharan Africa," Social Protection Discussion Papers 77927, The World Bank.
  11. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0284, National Bureau of Economic Research, Inc.
  12. Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, American Economic Association, vol. 86(4), pages 852-73, September.
  13. Mead, Donald C., 1984. "Of contracts and subcontracts: Small firms in vertically dis-integrated production/distribution systems in LDCs," World Development, Elsevier, Elsevier, vol. 12(11-12), pages 1095-1106.
  14. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1719, Harvard - Institute of Economic Research.
  15. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, Elsevier, vol. 2(2), pages 165-187, June.
  16. Lall, Sanjaya, 1980. "Vertical Inter-Firm Linkages in LDCs: An Empirical Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 42(3), pages 203-26, August.
  17. Mazumdar, Dipak, 1976. "The urban informal sector," World Development, Elsevier, Elsevier, vol. 4(8), pages 655-679, August.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ghani, Ejaz & O'Connell, Stephen D. & Sharma, Gunjan, 2013. "Friend or foe or family ? a tale of formal and informal plants in India," Policy Research Working Paper Series, The World Bank 6588, The World Bank.
  2. Mboutchouang, Vincent De Paul & Kenneck, Joseph Massil & Mbenga Bindop, Kunz Modeste, 2013. "Transmission Intergénérationelle de l’Entrepreneuriat et Performance des Unités de Production Informelles au Cameroun," MPRA Paper 50133, University Library of Munich, Germany, revised Aug 2013.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1751. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.