Networks, communities and markets in sub-Saharan Africa: implications for firm growth and investment
This paper examines how relationships and networks affect market exchange in Sub-Saharan Africa. After noting that market exchange arguably plays a larger role in Africa than in developed economies, we show that the presence of transactions costs naturally leads market participants to enter in long-term trading relationships. These relationships form business networks that shape market outcomes. We argue that network segmentation can have large efficiency and equity costs, particularly in international trade. Because of network externalities, groups and countries that are familiar with a particular activity tend to continue investing in that activity. The presence of networks and non-convex transactions costs also complicates the analysis of market competition. Implications for future research are briefly discussed.
|Date of creation:||1999|
|Contact details of provider:|| Postal: Manor Road, Oxford, OX1 3UQ|
Phone: +44-(0)1865 271084
Fax: +44-(0)1865 281447
Web page: http://www.csae.ox.ac.uk/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:1999-24. 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: (Richard Payne)
If references are entirely missing, you can add them using this form.