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Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa / Marcus Bohme.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Bohme, Marcus.
- Series:
- Other papers
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access to Finance.
- Agriculture.
- Capacity Building.
- Capital Costs.
- Capital Markets.
- Capital Requirements.
- Collateral.
- Consumers.
- Debt Markets.
- Developing Countries.
- Economic Development.
- Economies of Scale.
- Entrepreneurs.
- Expenditures.
- Finance and Financial Sector Development.
- Gdp.
- Human Capital.
- Industrialization.
- Informal Sector.
- Insurance.
- Job Creation.
- Market Economy.
- Microcredit.
- Microenterprises.
- Moneylenders.
- Moral Hazard.
- Political Economy.
- Private Sector Development.
- Profitability.
- Purchasing Power.
- Purchasing Power Parity.
- Risk Aversion.
- Savings.
- Small and Medium Size Enterprises.
- Social Networks.
- Transaction Costs.
- Unemployment.
- Local Subjects:
- Access to Finance.
- Agriculture.
- Capacity Building.
- Capital Costs.
- Capital Markets.
- Capital Requirements.
- Collateral.
- Consumers.
- Debt Markets.
- Developing Countries.
- Economic Development.
- Economies of Scale.
- Entrepreneurs.
- Expenditures.
- Finance and Financial Sector Development.
- Gdp.
- Human Capital.
- Industrialization.
- Informal Sector.
- Insurance.
- Job Creation.
- Market Economy.
- Microcredit.
- Microenterprises.
- Moneylenders.
- Moral Hazard.
- Political Economy.
- Private Sector Development.
- Profitability.
- Purchasing Power.
- Purchasing Power Parity.
- Risk Aversion.
- Savings.
- Small and Medium Size Enterprises.
- Social Networks.
- Transaction Costs.
- Unemployment.
- Place of Publication:
- Washington, D.C. : The World Bank, 2012.
- System Details:
- data file
- Summary:
- Employing a unique dataset that covers almost 6000 informal enterprises from six West African urban centers, this paper examines the backward and forward linkages of these enterprises to the formal sector. Authors first provide a descriptive analysis of the existing formal-informal linkages. It turns out that formal backward linkages are much more prevalent than formal forward linkages, and that linkages vary with the degree of informality, occurring less frequently if firms have no ties to the formal sector at all or low capital stocks. In the second step, authors employ a Probit approach to identify major factors associated with the observed backward linkages. The Probit analysis corroborates the importance of the degree of informality for the existence of linkages and shows various enterprise characteristics to be significant determinants as well. Finally, authors analyze whether backward linkages matter for enterprise performance using both Ordinary Least Squares (OLS) and four estimations. Authors find a positive and robust impact of backward linkages, whereas the degree of informality of the enterprises in our sample seems to affect firm performance only indirectly through their linkages to the formal sector.
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