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Ethnic Networks and Enterprise Credit: The Serahules of The Gambia

Ousman Gajigo and Jeremy Foltz

No 61822, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: This work analyzes the effects of ethnic heterogeneity on credit and entrepreneurship in The Gambia. We develop a model of credit transactions based on ethnic density, which shows that where formal credit markets fail denser ethnic groups will have better access to credit. This work places a special emphasis on the Serahule ethnic group, which is ethnically dense and entrepreneurially successful. Our results show that Serahule-owned enterprises are indeed larger and more profitable. Furthermore, their marginal rate of return of capital is significantly lower than that of enterprises owned by other ethnicities, as one would expect with lower credit constraints.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 38
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61822

DOI: 10.22004/ag.econ.61822

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