Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152403
Authors: 
Chakraborty, Tanika
Mukherjee, Anirban
Saha, Sarani
Year of Publication: 
2015
Citation: 
[Journal:] IZA Journal of Labor & Development [ISSN:] 2193-9020 [Volume:] 4 [Year:] 2015 [Issue:] 7 [Pages:] 1-21
Abstract: 
In this paper we theoretically and empirically examine how the interaction between the formal court system and the informal loan network affects a household's decision to start a business. We find that when the formal court system is weak, expansion of informal credit network leads to the proliferation of business. However, with a sufficiently strong court system, expansion of the credit network has a negative effect on business prospects. This result is explained by the contradictions between formal laws and norms used by informal networks.
Subjects: 
Informal network
Court
Formal institution
Entrepreneurship
JEL: 
K12
L26
O17
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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