In this research, we ask whether kinship networks help promote entrepreneurship or impede its development in the Kyrgyz Republic. We conducted a survey of firm managers/entrepreneurs about the nature of their business networks, what kinds of business and non-business resources they receive from and provide to their various contacts, their firms’ performance, and the business environment they face. Our data indicate that a firm’s profitability is positively associated with in-network kin connections and negatively associated with out-network kin connections. While firms that rely more heavily on kin in their business networks grow more slowly than firms that rely less heavily on kin, they grow faster than firms that do not access business networks for help at all. In addition, we find no relationship between kin connections and firm performance for firms that have adopted best business practices.
Authors: Paul Castañeda Dower, University of Wisconsin-Madison, Theodore P. Gerber, University of Wisconsin-Madison, and Shlomo Weber, New Economic School