Journal
OXFORD ECONOMIC PAPERS-NEW SERIES
Volume 54, Issue 2, Pages 173-206Publisher
OXFORD UNIV PRESS
DOI: 10.1093/oep/54.2.173
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- Economic and Social Research Council [M571255001] Funding Source: researchfish
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Using data on agricultural traders in Madagascar, this paper shows that social network capital has a large effect on firm productivity. Better connected traders have significantly larger sales and value added than less connected traders after controlling for physical and human inputs as well as for entrepreneur characteristics. The analysis indicates that three dimensions of social network capital should be distinguished: relationships with other traders, which among other things help firms economize on transactions costs; relationships with potential lenders; and family relationships. We find no evidence that social capital favors collusion.
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