Wednesday, November 7, 2012

8 November 2012: Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam

Christophe Jalil Nordman
DIAL, University Paris-Dauphine and IRD

Using a panel of non-farm household businesses for Vietnam, this paper sheds light on the links between households’ and entrepreneurs’ social networks and household business performance. We address three related questions. One first question is whether we can find evidence of a differentiated effect of employment of members of the extended family versus hired workers on the business performance. Then we examine the extent, intensity and determinants of potential redistributive pressure exerted by the extended family, and borne by households running household businesses, notably under the form of inter-household transfers received and given. Finally, we identify the potential effects of redistributive pressure (from family and kinship ties, the social network capital, and the community) on the household businesses’ technical efficiency. A cross-cutting issue is that all these analyses are performed separately for formal and informal businesses so as to ask whether social network support is more critical in the informal economy. We find evidence of a productivity differential between family and hired labour in the informal sector. In addition, the data do not support the hypothesis of substitutability between family and hired labour, which seems consistent with the idea that managerial and supervisory tasks may be mainly performed by family members. The results of transfer equations confirm the high propensity of households to transfer given their available resources and are consistent with the idea that family, kinship but also community level features exert an effect on the size and type of transfers to and from households. Finally, using information on the entrepreneurs’ social capital and looking at firm efficiency, we confirm the importance of unlocking financial constraints and improving access to professional support for successful household entrepreneurship.

Date: November 8, 2012
Time: 03:00 P.M.

AMEX Conference Room (Second Floor)
Department of Economics,
Delhi School of Economics,
New Delhi-110007(INDIA)


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