Working Paper

Informal Sector Dynamics in Times of Fragile Growth : The Case of Madagascar

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collection.link.213
https://openknowledge.worldbank.org/handle/10986/11866
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dc.contributor.author
Vaillant, Julia
dc.contributor.author
Grimm, Michael
dc.contributor.author
Lay, Jann
dc.contributor.author
Roubaud, François
dc.date.accessioned
2017-05-30T22:19:39Z
dc.date.available
2017-05-30T22:19:39Z
dc.date.issued
2011-09
dc.date.lastModified
2021-04-23T14:04:38Z
dc.description.abstract
This paper investigates the dynamics of the informal sector in Madagascar during a period of fragile growth. Overall, the behavior of informal firms in terms of earnings, employment and capital accumulation points to a degree of heterogeneity which goes beyond a simple dualistic model and even a more refined model that would distinguish between an upper entrepreneurial and a lower subsistence tier within the informal sector. However, in line with the dualistic model, the informal sector indeed fulfills a labor absorbing function in times of crisis. During the growth period authors see capital accumulation in most of the sectors and lots of evidence that households expand their activities. However, this happens mainly through the creation of new firms instead of the expansion of existing ones, which is consistent with much higher returns at very low levels of capital. More rapid expansion can be observed in sectors that operate with lower capital intensity, which is also consistent with risk or credit constraints as major deterrents to expansion. While there is some indication that total factor productivity increased over time, returns to capital and labor where not higher at the end of the observation period than at the beginning. Returns are also rather low at high levels of capital. These findings point to a limited growth potential of the informal sector as a whole. The heterogeneity in capital returns hints at large inefficiencies in allocating capital across informal firms.
en
dc.identifier
http://documents.worldbank.org/curated/en/357541468337172457/Informal-sector-dynamics-in-times-of-fragile-growth-the-case-of-Madagascar
dc.identifier.uri
http://hdl.handle.net/10986/26798
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
ACCESS TO CAPITAL
dc.subject
ACCESS TO CREDIT
dc.subject
ACCESS TO FINANCE
dc.subject
ACCESS TO FORMAL CREDIT
dc.subject
ACCOUNTS
dc.subject
ACCUMULATION RATE
dc.subject
ADVANCED ECONOMIES
dc.subject
ADVANCED ECONOMY
dc.subject
AGRICULTURAL ECONOMICS
dc.subject
BANK CREDIT
dc.subject
BANK POLICY
dc.subject
BARRIERS TO ENTRY
dc.subject
BIASES
dc.subject
BORROWING
dc.subject
BUSINESS ACTIVITIES
dc.subject
BUSINESS ACTIVITY
dc.subject
BUSINESS ASSOCIATIONS
dc.subject
BUSINESS ECONOMICS
dc.subject
BUSINESS OWNERS
dc.subject
BUSINESS RISK
dc.subject
BUSINESS RISKS
dc.subject
CAPACITY BUILDING
dc.subject
CAPITAL ACCUMULATION
dc.subject
CAPITAL CONSTRAINT
dc.subject
CAPITAL CONSTRAINTS
dc.subject
CAPITAL COST
dc.subject
CAPITAL COSTS
dc.subject
CAPITAL INJECTION
dc.subject
CAPITAL MARKET
dc.subject
CAPITAL MARKETS
dc.subject
CAPITAL REQUIREMENTS
dc.subject
CAPITAL RETURNS
dc.subject
CAPITAL SHORTAGES
dc.subject
CAPITAL STOCK
dc.subject
CAPITAL STOCKS
dc.subject
CHECKS
dc.subject
COLLATERAL
dc.subject
CONTRACTUAL OBLIGATIONS
dc.subject
COST OF CAPITAL
dc.subject
CREDIT CONSTRAINED FIRMS
dc.subject
CREDIT CONSTRAINT
dc.subject
CREDIT CONSTRAINTS
dc.subject
CREDIT HISTORY
dc.subject
CREDIT INSTITUTIONS
dc.subject
CREDIT MARKET
dc.subject
CREDIT MARKETS
dc.subject
CREDIT RATIONING
dc.subject
DEGREES OF RISK
dc.subject
DEMOGRAPHIC CHARACTERISTICS
dc.subject
DEVELOPING COUNTRIES
dc.subject
DEVELOPING COUNTRY
dc.subject
DEVELOPMENT ECONOMICS
dc.subject
DIVERSIFICATION
dc.subject
DUMMY VARIABLE
dc.subject
DUMMY VARIABLES
dc.subject
DURABLE
dc.subject
DURABLE GOODS
dc.subject
EARNINGS
dc.subject
ECONOMETRIC MODELS
dc.subject
ECONOMIC CONSTRAINTS
dc.subject
ECONOMIC DEVELOPMENT
dc.subject
ECONOMIC GROWTH
dc.subject
ECONOMIC POLICIES
dc.subject
ECONOMIC STATISTICS
dc.subject
ENDOWMENTS
dc.subject
ENTERPRISE PERFORMANCE
dc.subject
ENTREPRENEUR
dc.subject
ENTREPRENEURIAL ACTIVITIES
dc.subject
ENTREPRENEURIAL ACTIVITY
dc.subject
ENTREPRENEURS
dc.subject
ENTRY BARRIERS
dc.subject
EQUIPMENT
dc.subject
EXCESSIVE RISK
dc.subject
EXPECTED UTILITY
dc.subject
EXPECTED VALUE
dc.subject
EXPENDITURE
dc.subject
EXPENDITURES
dc.subject
EXTERNAL FINANCE
dc.subject
FAMILY FINANCE
dc.subject
FAMILY LOANS
dc.subject
FARMERS
dc.subject
FEMALE ENTREPRENEURS
dc.subject
FINANCIAL MEANS
dc.subject
FINANCIAL RESOURCES
dc.subject
FINANCIAL SUPPORT
dc.subject
FIXED COSTS
dc.subject
FORMAL BANKS
dc.subject
GDP
dc.subject
GROUP OF FIRMS
dc.subject
GROWTH THEORY
dc.subject
HIGH INTEREST RATES
dc.subject
HOLDING
dc.subject
HOUSEHOLD WEALTH
dc.subject
HOUSEHOLDS
dc.subject
HUMAN CAPITAL
dc.subject
INCOME GROWTH
dc.subject
INFORMATION ASYMMETRIES
dc.subject
INFORMATION ON ENTREPRENEURS
dc.subject
INFORMATION ON INVESTMENT
dc.subject
INSTRUMENT
dc.subject
INSURANCE
dc.subject
INSURANCE MARKET
dc.subject
INSURANCE MARKETS
dc.subject
INSURANCE PRODUCTS
dc.subject
INTEREST RATE
dc.subject
INTERNAL FINANCE
dc.subject
INTERNAL FUNDS
dc.subject
INVENTORIES
dc.subject
INVENTORY
dc.subject
INVESTING
dc.subject
INVESTMENT BEHAVIOR
dc.subject
JOB CREATION
dc.subject
LABOR FORCE SURVEY
dc.subject
LABOR MARKET
dc.subject
LABOR MARKETS
dc.subject
LACK OF ACCESS
dc.subject
LEVEL OF RISK
dc.subject
LIQUID WEALTH
dc.subject
LIQUIDITY
dc.subject
LIQUIDITY CONSTRAINT
dc.subject
LIQUIDITY CONSTRAINTS
dc.subject
LIQUIDITY PREMIUM
dc.subject
LIQUIDITY PROBLEMS
dc.subject
LOAN
dc.subject
LOTTERY
dc.subject
MARGINAL COST
dc.subject
MARGINAL PRODUCT
dc.subject
MARGINAL UTILITY
dc.subject
MARGINAL UTILITY OF CONSUMPTION
dc.subject
MARKET CONSTRAINTS
dc.subject
MARKET ECONOMY
dc.subject
MARKET FAILURE
dc.subject
MARKET FAILURES
dc.subject
MARKET INTEREST RATE
dc.subject
MARKET INTEREST RATES
dc.subject
MICRO DATA
dc.subject
MICRO ENTERPRISES
dc.subject
MICRO-CREDIT
dc.subject
MICRO-ENTERPRISE
dc.subject
MICRO-FINANCE
dc.subject
MICRO-FINANCE INSTITUTIONS
dc.subject
MICROCREDIT
dc.subject
MICROENTERPRISES
dc.subject
MIDDLE INCOME COUNTRIES
dc.subject
MONEY LENDERS
dc.subject
MONEYLENDERS
dc.subject
MORAL HAZARD
dc.subject
OPPORTUNITY COST
dc.subject
OPPORTUNITY COSTS
dc.subject
PHYSICAL CAPITAL
dc.subject
POLITICAL ECONOMY
dc.subject
PORTFOLIO
dc.subject
PRICE RISK
dc.subject
PRICE UNCERTAINTY
dc.subject
PRODUCTION FUNCTION
dc.subject
PRODUCTIVE INVESTMENT
dc.subject
PROFITABILITY
dc.subject
PURCHASING POWER
dc.subject
PURCHASING POWER PARITY
dc.subject
RATE OF RETURN
dc.subject
RATES OF RETURN
dc.subject
RECEIPTS
dc.subject
REINVESTMENT
dc.subject
RETAINED EARNINGS
dc.subject
RISK AVERSION
dc.subject
RISK PERCEPTIONS
dc.subject
RISK PREMIUM
dc.subject
RISK-AVERSE INDIVIDUALS
dc.subject
SAFE ASSET
dc.subject
SAVINGS
dc.subject
SELF-EMPLOYMENT
dc.subject
SMALL BUSINESS
dc.subject
SMALL ENTERPRISES
dc.subject
SMALL-SCALE ENTREPRENEURS
dc.subject
SOURCE OF CREDIT
dc.subject
SOURCES OF FINANCE
dc.subject
START-UP
dc.subject
TAX
dc.subject
TAXIS
dc.subject
TRADE SECTOR
dc.subject
TRADING
dc.subject
TRANSITION COUNTRY
dc.subject
TRANSITION ECONOMY
dc.subject
TRUST FUND
dc.subject
UNION
dc.subject
VALUE ADDED
dc.subject
WEALTH
dc.title
Informal Sector Dynamics in Times of Fragile Growth
en
dc.title.subtitle
The Case of Madagascar
en
dc.type
Working Paper
en
okr.date.disclosure
2011-09
okr.doctype
Publications & Research :: Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/357541468337172457/Informal-sector-dynamics-in-times-of-fragile-growth-the-case-of-Madagascar
okr.googlescholar.linkpresent
yes
okr.identifier.externaldocumentum
000356161_20130524120156
okr.identifier.internaldocumentum
17752757
okr.identifier.report
77929
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/357541468337172457/pdf/779290WP0P1151000DynamicsMadagascar.pdf
en
okr.region.administrative
Africa
okr.region.country
Madagascar
okr.topic
Finance and Financial Sector Development :: Access to Finance
okr.topic
Finance and Financial Sector Development :: Debt Markets
okr.topic
Macroeconomics and Economic Growth :: Economic Theory & Research
okr.topic
Macroeconomics and Economic Growth :: Investment and Investment Climate
okr.topic
Private Sector Development :: Legal Regulation and Business Environment
okr.topic
Private Sector Development :: Microenterprises
okr.topic
Macroeconomics and Economic Growth :: Economic Conditions and Volatility
okr.unit
Social Protection and Labor

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