Social capital as a substitute for formality: Evidence from Bolivia
The paper studies the role of social capital in the urban informal sector in Bolivia. It shows that a formal firm has about 6.4 times the sales of an informal firm with no social capital, but informal firms use their social capital to compensate for the lack of formal productivity benefits. By being formal, firms obtain permanent visibility because they can operate a shop or a visible production location and they can produce in locations with better public infrastructure. Informal firms, in contrast, sell in one place – typically in street markets in front of formal shops – and produce in another — typically in the outskirts. Social capital increases accessibility of informal firms and provides them with security benefits at their production location.
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.:
- repec:cup:cbooks:9780521348911 is not listed on IDEAS
- Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2005.
"How Do Institutions Affect Corruption and the Shadow Economy,"
0505, Exeter University, Department of Economics.
- Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2009. "How do institutions affect corruption and the shadow economy?," International Tax and Public Finance, Springer, vol. 16(6), pages 773-796, December.
- Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2005. "How do Institutions Affect Corruption and the Shadow Economy?," Public Economics 0502012, EconWPA, revised 24 Feb 2005.
- McKenzie, David & Sakho, Yaye Seynabou, 2007.
"Does it pay firms to register for taxes ? the impact of formality on firm profitability,"
Policy Research Working Paper Series
4449, The World Bank.
- McKenzie, David & Seynabou Sakho, Yaye, 2010. "Does it pay firms to register for taxes? The impact of formality on firm profitability," Journal of Development Economics, Elsevier, vol. 91(1), pages 15-24, January.
- McKenzie, David & Sakho, Yaye Seynabou, 2007. "Does It Pay Firms to Register for Taxes? The Impact of Formality on Firm Profitability," IZA Discussion Papers 3179, Institute for the Study of Labor (IZA).
- Krishna, Anirudh, 2001. "Moving from the Stock of Social Capital to the Flow of Benefits: The Role of Agency," World Development, Elsevier, vol. 29(6), pages 925-943, June.
- Marcel Fafchamps, 2005.
"Development and Social Capital,"
Economics Series Working Papers
GPRG-WPS-007, University of Oxford, Department of Economics.
- Woodruff, Christopher, 1998. "Contract enforcement and trade liberalization in Mexico's footwear industry," World Development, Elsevier, vol. 26(6), pages 979-991, June.
- Timothy Besley & Torsten Persson, 2007.
"The Origins of State Capacity: Property Rights, Taxation, and Politics,"
NBER Working Papers
13028, National Bureau of Economic Research, Inc.
- Timothy Besley & Torsten Persson, 2009. "The Origins of State Capacity: Property Rights, Taxation, and Politics," American Economic Review, American Economic Association, vol. 99(4), pages 1218-44, September.
- Timothy Besley & Torsten Persson, 2009. "The origins of state capacity: property rights, taxation and politics," LSE Research Online Documents on Economics 33768, London School of Economics and Political Science, LSE Library.
- Besley, Timothy J. & Persson, Torsten, 2007. "The Origins of State Capacity: Property Rights, Taxation, and Politics," CEPR Discussion Papers 6370, C.E.P.R. Discussion Papers.
- Steven Durlauf & Marcel Fafchamps, 2004.
Development and Comp Systems
- Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," CSAE Working Paper Series 2004-14, Centre for the Study of African Economies, University of Oxford.
- Durlauf,S.N. & Fafchamps,M., 2004. "Social capital," Working papers 12, Wisconsin Madison - Social Systems.
- Marcel Fafchamps & Steven N. Durlauf, 2004. "Social Capital," Economics Series Working Papers WPS/2004-14, University of Oxford, Department of Economics.
- Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc.
- Beckmann, Volker & Boger, Silke, 2004.
"Courts and contract enforcement in transition agriculture: theory and evidence from Poland,"
Blackwell, vol. 31(2-3), pages 251-263, December.
- 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.
- Grootaert, Christiaan & Narayan, Deepa, 2004. "Local Institutions, Poverty and Household Welfare in Bolivia," World Development, Elsevier, vol. 32(7), pages 1179-1198, July.
- Simon Johnson & John McMillan & Christopher Woodruff, 2001.
"Courts and Relational Contracts,"
NBER Working Papers
8572, National Bureau of Economic Research, Inc.
- Grigor Sukiassyan & Jeffrey Nugent, 2008. "Associations versus registration as alternative strategies of small firms," Small Business Economics, Springer, vol. 31(2), pages 147-161, August.
- Kurt Annen, 2001. "Inclusive and Exclusive Social Capital in the Small-Firm Sector in Developing Countries," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(2), pages 319-, June.
- Anke Kessler & Christoph Lülfesmann, 2004. "Bilateral bargaining, unverifiable quality, and options to return," Economic Theory, Springer, vol. 23(2), pages 395-410, January.
- Ahlerup, Pelle & Olsson, Ola & Yanagizawa, David, 2007. "Social Capital vs Institutions in the Growth Process," Working Papers in Economics 248, University of Gothenburg, Department of Economics.
- Annen, Kurt, 2003. "Social capital, inclusive networks, and economic performance," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 449-463, April.
When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:31:y:2013:i:c:p:82-92. 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: (Zhang, Lei)
If references are entirely missing, you can add them using this form.