Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa

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 analys...

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Main Authors:	Böhme, Marcus, Thiele, Rainer
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	CAPITAL STOCKS ENTERPRISE PERFORMANCE FORMAL-INFORMAL LINKAGE FORMAL SECTOR INFORMAL ENTERPRISES ORDINARY LEAST SQUARES PROBIT ANALYSIS URBAN CENTERS
Online Access:	http://documents.worldbank.org/curated/en/252061468155715434/Informal-formal-linkages-and-informal-enterprise-performance-in-urban-West-Africa http://hdl.handle.net/10986/26787

id	okr-10986-26787
recordtype	oai_dc
spelling	okr-10986-267872021-04-23T14:04:38Z Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa Böhme, Marcus Thiele, Rainer CAPITAL STOCKS ENTERPRISE PERFORMANCE FORMAL-INFORMAL LINKAGE FORMAL SECTOR INFORMAL ENTERPRISES ORDINARY LEAST SQUARES PROBIT ANALYSIS URBAN CENTERS 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. 2017-05-30T21:00:43Z 2017-05-30T21:00:43Z 2012-01 Working Paper http://documents.worldbank.org/curated/en/252061468155715434/Informal-formal-linkages-and-informal-enterprise-performance-in-urban-West-Africa http://hdl.handle.net/10986/26787 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research Africa West Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	CAPITAL STOCKS ENTERPRISE PERFORMANCE FORMAL-INFORMAL LINKAGE FORMAL SECTOR INFORMAL ENTERPRISES ORDINARY LEAST SQUARES PROBIT ANALYSIS URBAN CENTERS
spellingShingle	CAPITAL STOCKS ENTERPRISE PERFORMANCE FORMAL-INFORMAL LINKAGE FORMAL SECTOR INFORMAL ENTERPRISES ORDINARY LEAST SQUARES PROBIT ANALYSIS URBAN CENTERS Böhme, Marcus Thiele, Rainer Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
geographic_facet	Africa West Africa
description	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.
format	Working Paper
author	Böhme, Marcus Thiele, Rainer
author_facet	Böhme, Marcus Thiele, Rainer
author_sort	Böhme, Marcus
title	Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
title_short	Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
title_full	Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
title_fullStr	Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
title_full_unstemmed	Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa
title_sort	informal-formal linkages and informal enterprise performance in urban west africa
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/252061468155715434/Informal-formal-linkages-and-informal-enterprise-performance-in-urban-West-Africa http://hdl.handle.net/10986/26787
_version_	1764462839811014656

Informal-Formal Linkages and Informal Enterprise Performance in Urban West Africa

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