Kinship ties and entrepreneurship in Western Africa

Michael Grimm, Flore Gubert, Ousman Koriko, Jann Lay and Christophe Nordman

Post-Print from HAL

Abstract: Small entrepreneurs in poor countries achieve relatively high marginal returns to capital but show only low re-investment rates. The literature is rather inconclusive about the possible causes. We explore whether ‘forced redistribution', i.e. abusive demands by the kin, affects the allocation of capital and labor to the household firm. We use an original data-set covering household firms in seven economic centers in Western Africa. We find some evidence that family and kinship ties within the city rather enhance labor effort and the use of capital. However, the stronger the ties to the village of origin the lower input use which is supporting the ‘forced redistribution' hypothesis. Given that such redistribution is partly the consequence of a lack of formal insurance mechanisms, these results suggest that the provision of health insurance and other insurance devices may have positive indirect effects on private sector development.

Keywords: Solidarité forcée; micro et petites entreprises; partage; Afrique de l'Ouest; forced solidarity; micro and small enterprises; sharing; West Africa (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Published in Journal of Small Business & Entrepreneurship, 2013, 26 (2), ⟨10.1080/08276331.2013.771854⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:hal:journl:hal-01521952

DOI: 10.1080/08276331.2013.771854

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().