Chapter

The Role of Business Networks in Market Development in Sub‐Saharan Africa

Marcel Fafchamps

in Communities and Markets in Economic Development

Published in print May 2001 | ISBN: 9780199241019
Published online August 2004 | e-ISBN: 9780191601217 | DOI: http://dx.doi.org/10.1093/0199241015.003.0007
 The Role of Business Networks in Market Development in Sub‐Saharan Africa

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This chapter examines the role of business networks in market development and community formation in Sub-Saharan Africa. It is shown that for firms above a minimum size, relational contracting is the rule in markets for agricultural products, and manufacturing inputs and outputs. The important roles of relationships in facilitating market exchange are documented. The role of community affiliation in the membership of business networks is then examined. It is argued that entry into existing networks is biased, and that referral by family and friends is the most likely cause of ethnic concetration.

Keywords: business networks; market development; community formation; Sub-Saharan Africa; ethnic concentration

Chapter.  12826 words. 

Subjects: Economic Development and Growth

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