Court-ship, kinship and business: a study on the interaction between the formal and the informal institutions and its effect on entrepreneurship

Tanika Chakraborty (), Anirban Mukherjee () and Sarani Saha

IZA Journal of Labor & Development, 2015, vol. 4, issue 1, 1-21

Abstract: In this paper we theoretically and empirically examine how the interaction between the formal court system and the informal loan network affects a household’s decision to start a business. We find that when the formal court system is weak, expansion of informal credit network leads to the proliferation of business. However, with a sufficiently strong court system, expansion of the credit network has a negative effect on business prospects. This result is explained by the contradictions between formal laws and norms used by informal networks. JEL codes K12; L26; O17 Copyright Chakraborty et al.; licensee Springer. 2015

Keywords: Informal network; Court; Formal institution; Entrepreneurship (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1186/s40175-015-0027-5 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Court-ship, Kinship and Business: A Study on the Interaction between the Formal and the Informal Institutions and Its Effect on Entrepreneurship (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:izaldv:v:4:y:2015:i:1:p:1-21:10.1186/s40175-015-0027-5

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40175

DOI: 10.1186/s40175-015-0027-5

Access Statistics for this article

IZA Journal of Labor & Development is currently edited by David Lam, Hartmut Lehmann and Jackline Wahba

More articles in IZA Journal of Labor & Development from Springer, Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().