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Are Informal Networks Predominantly an Emerging Market Phenomenon?

Horak, S. (2020). Are Informal Networks Predominantly an Emerging Market Phenomenon? (pp. 125-137).
In C. Storz & M. Taube (eds.), Firms, Institutions, and the State in East Asia: A Festschrift in Honour of Werner Pascha. Marburg: Metropolis.

Abstract
Scholars typically assume that informal networks are predominately influential in emerging markets as they fill voids left by non-existend or disfunctional formal institutions. Further, it is assumed that informal networks disappear with the further development of formal institutions. We challenge the disappearance assumption and argue in favor for the persistence hypothesis (Horak & Klein 2016), by putting forward the case of two persisting and pervasive informal networks in two developed and industrialized countries: yongo in South Korea and jinmyaku in Japan. We conclude that informal networks persist in advanced economies with effective and functioning formal institutions.

Keywords
Informal networks, emerging markets, institutions, informal institutions, informality, networking.


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