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Value Added of Cluster Membership for Micro Enterprises of the Handloom Sector in Ethiopia

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  • Ali, Merima
  • Peerlings, Jack

Abstract

Summary By contrasting the performance of clustered micro enterprises with that of dispersed ones in the handloom sector in Ethiopia, this study shows that clustering significantly increases profit. To correct for selection bias, we match clustered and dispersed micro enterprises that share similar observable characteristics except for being clustered both in urban and rural areas. Results show that clustering is more profitable in urban than rural areas. It is also found that regional-specific factors determining clustering of micro enterprises are different in urban and rural areas, highlighting the need to focus on local circumstances when formulating policies to promote clusters.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 3 (March)
Pages: 363-374

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:3:p:363-374

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: cluster micro enterprises propensity score matching; handloom Africa Ethiopia;

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Cited by:
  1. Owoo, Nkechi S. & Naudé, Wim, 2014. "Non-Farm Enterprise Productivity and Spatial Autocorrelation in Rural Africa: Evidence from Ethiopia and Nigeria," IZA Discussion Papers 8295, Institute for the Study of Labor (IZA).

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