Publication:
Barriers to Entry and Returns to Capital in Informal Activities: Evidence from Sub-Saharan Africa

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dc.contributor.authorGrimm, Michael
dc.contributor.authorKruger, Jens
dc.contributor.authorLay, Jann
dc.date.accessioned2017-06-27T18:34:24Z
dc.date.available2017-06-27T18:34:24Z
dc.date.issued2011-05
dc.description.abstractThis paper investigates the patterns of capital entry barriers and capital returns in informal Micro and Small Enterprises (MSE's) using a unique micro data set seven West-African countries. The author's findings support the view of a heterogeneous informal sector that is not primarily host to subsistence activities. While an assessment of initial investment identifies some informal activities with negligible entry barriers, a notable cost of entry is associated to most activities. The authors find very heterogeneous patterns of capital returns in informal MSE's. At very low levels of capital, marginal returns are extremely high- often exceeding 70 percent per month. Above a capital stock of 150 international dollars, marginal returns are found to be relatively low at around 4 to 7 percent monthly. The authors provide some evidence that the high returns at low capital stocks reflect high risks. At the same time, most MSE's appear to be severely capital constrained.en
dc.identifierhttp://documents.worldbank.org/curated/en/195371468313855766/Barriers-to-entry-and-returns-to-capital-in-informal-activities-evidence-from-Sub-Saharan-Africa
dc.identifier.doi10.1596/27365
dc.identifier.urihttps://hdl.handle.net/10986/27365
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectACCESS TO CAPITAL
dc.subjectACCOUNTS
dc.subjectBANK POLICY
dc.subjectBARRIER TO ENTRY
dc.subjectBORROWING CAPACITY
dc.subjectCAPACITY BUILDING
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL ALLOCATIONS
dc.subjectCAPITAL CONSTRAINT
dc.subjectCAPITAL INVESTMENTS
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL REQUIREMENTS
dc.subjectCAPITAL STOCK
dc.subjectCHECKS
dc.subjectCOLLATERAL
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT PROGRAMS
dc.subjectCREDIT PROVIDERS
dc.subjectCREDIT RATIONING
dc.subjectCURRENCY
dc.subjectDECREASING RETURNS
dc.subjectDEVELOPING COUNTRY
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDISTRIBUTION OF WEALTH
dc.subjectECONOMIC CONSTRAINTS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC GROWTH
dc.subjectELASTICITY
dc.subjectENTRY BARRIERS
dc.subjectEQUIPMENT
dc.subjectEXOGENOUS VARIABLES
dc.subjectEXPENDITURE
dc.subjectFACTOR RETURNS
dc.subjectFINANCIAL SUPPORT
dc.subjectFIRST YEAR
dc.subjectFIXED COSTS
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGROWTH THEORY
dc.subjectHOUSEHOLD WEALTH
dc.subjectINCOME DISTRIBUTION
dc.subjectINCOME LEVELS
dc.subjectINFORMAL CREDIT
dc.subjectINSTRUMENT
dc.subjectINTEREST PAYMENTS
dc.subjectINVENTORY
dc.subjectINVESTING
dc.subjectINVESTMENT BEHAVIOR
dc.subjectLABOR MARKETS
dc.subjectLEVEL OF CAPITAL
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectMACROECONOMICS
dc.subjectMARGINAL RATE OF RETURN
dc.subjectMARGINAL RETURN TO CAPITAL
dc.subjectMARKET CONSTRAINTS
dc.subjectMARKET IMPERFECTIONS
dc.subjectMICRO DATA
dc.subjectMICRO-CREDIT
dc.subjectMICROENTERPRISES
dc.subjectMONEY LENDERS
dc.subjectPOLITICAL ECONOMY
dc.subjectPORTFOLIOS
dc.subjectPROFITABILITY
dc.subjectPURCHASING POWER
dc.subjectRATES OF RETURNS
dc.subjectRETURNS
dc.subjectRISK AVERSE
dc.subjectRISK AVERSION
dc.subjectSTATIC ANALYSIS
dc.subjectTAX
dc.subjectTOTAL CAPITAL STOCK
dc.subjectTRADE SECTOR
dc.subjectTRADER
dc.subjectTRADING
dc.subjectTRUST FUND
dc.subjectUNIT OF CAPITAL
dc.subjectVALUE ADDED
dc.subjectWEALTH
dc.titleBarriers to Entry and Returns to Capital in Informal Activitiesen
dc.title.subtitleEvidence from Sub-Saharan Africaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleBarriers to Entry and Returns to Capital in Informal Activities
okr.date.disclosure2013-05-24
okr.date.doiregistration2025-05-05T12:17:34.078794Z
okr.doctypePublications & Research::Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/195371468313855766/Barriers-to-entry-and-returns-to-capital-in-informal-activities-evidence-from-Sub-Saharan-Africa
okr.guid195371468313855766
okr.identifier.externaldocumentum000442464_20130524102916
okr.identifier.internaldocumentum17752598
okr.identifier.report77927
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/195371468313855766/pdf/779270WP0P11510PUBLIC00ReturnsWAEMU.pdfen
okr.region.geographicalSub-Saharan Africa
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Economic Theory & Research
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.topicPrivate Sector Development::Business Environment
okr.topicPrivate Sector Development::Microenterprises
okr.topicPrivate Sector Development::Small and Medium Size Enterprises
okr.unitSocial Protection Team (HDNSP)
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