Starting businesses through reciprocal informal subcontracting: Evidence from the informal garment industry in ho chi minh city

Abstract

This paper addresses the question of how cash constrained and inexperienced people in developing countries can start their businesses by looking at the informal garment industry of Ho Chi Minh City, Vietnam. This industry caters primarily for the domestic local markets and produce garments through local subcontracting systems. These subcontracting systems are embedded in social networks, which are based on kinship and territorial relationships, and are reciprocal in nature. This paper argues that in the absence of formal institutions supporting business start-ups, such reciprocal informal subcontracting could play major roles. © 2011 John Wiley & Sons, Ltd.