WP 537 Constrained gazelles. High potentials in West Africa’s informal economy / by M. Grimm, P. Knorringa, J. Lay J.
ISS Working Paper by Michael Grimm, Peter Knorringa, and Jann Lay
Abstract
The informal sector is typically characterized as being very heterogeneous and possibly composed of two clearly distinct segments, sometimes called the lower and upper tier. However, empirical evidence shows that even among lower tier entrepreneurs profitability can be quite high.
We combine these findings and develop an innovative approach to identify what we call ‘constrained gazelles’, next to the well-known survivalists in the lower tier and growth-oriented top-performers in the upper tier. Our sample of informal entrepreneurs in seven West-African countries allows to link the relative size of these three groups to the structural and macroeconomic environment in these countries.
Keywords
Informality, entrepreneurship, capital, managerial ability, targeting, West-Africa.
JEL codes: D22, O17
About the authors
| Michael Grimm is Professor of Applied Development Economics, at the International Institute of Social Studies. He works on problems related to income distribution and poverty in developing countries. |
| Peter Knorringa is Associate Professor of Private Sector and Development, at the International Institute of Social Studies. His research interests are: private governance and standards, development relevance of fair trade, ethical trade, and CSR, global value chains, clusters, and urban poverty alleviation |
| Jann Lay is Junior-Professor at the Georg-August-Universität, Göttingen and Research Fellow at the German Institute of Global and Area Studies (GIGA), Hamburg, Germany. He has frequently acted as consultant to national and international development organizations (GTZ, KfW, OECD, World Bank). |
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Publication date: Friday, 09 March 2012
