EconPapers    
Economics at your fingertips  
 

Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

Philippe Alby, Emmanuelle Auriol and Pierre Nguimkeu

No 18-956, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: In the absence of a public safety net, wealthy Africans have the social obligation to share their re- sources with their needy relatives in the form of cash transfers and inefficient family hiring. We develop a model of entrepreneurial choice that accounts for this social redistributive constraint. We derive pre- dictions regarding employment choices, productivity, and profitability of firms ran by entrepreneurs of African versus non-African origin. Everything else equal, local firms are over-staffed and less productive than firms owned by nonlocals, which discourages local entrepreneurship. Using data from the manu- facturing sector, we illustrate the theory by structurally estimating the proportion of missing African entrepreneurs. Our estimates, which are suggestive due to the data limitation, vary between 8% and 12.6% of the formal sector workforce. Implications for the role of social protection are discussed.

Keywords: Entrepreneurship; Family Solidarity; Formal Sector; Africa (search for similar items in EconPapers)
JEL-codes: C51 H53 H55 O14 O17 O55 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-afr and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... /2018/wp_tse_956.pdf Full text (application/pdf)

Related works:
Journal Article: Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis (2020) Downloads
Working Paper: Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis (2020) Downloads
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:tse:wpaper:32964

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-04-01
Handle: RePEc:tse:wpaper:32964