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Location Choice and Performance of Furniture Workshops in Arusha, Tanzania

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  • Muto, Megumi
  • Yessica
  • Chung, C.Y.
  • Shimikoshi, Shinobu
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    Abstract

    This study uses data collected in an emerging furniture cluster in the Tanzanian city of Arusha to investigate the determinants of location choice and location effect on the performance of micro and small furniture enterprises in Africa. Based on empirical analyses of a census of 234 workshops located in five sub-clusters, the results show that furniture producers tend to locate in sub-clusters where industrial peers from their own ethnic group have gathered. Meanwhile, the results, consistent with the literature on agglomeration economics, shows that entrepreneurs in Africa desire to locate in proximity to a large output market. However, performance analyses show that ethnic networks did not contribute to the performance of workshops as measured by DEA and product quality. In contrast, workshops located in sub-clusters with more machinery shops outperformed workshops located in sub-clusters with fewer machinery shops, implying that well-integrated upstream industries in the sub-cluster foster the development of the industry.

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    File URL: http://hdl.handle.net/10685/52
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    File URL: http://repository.ri.jica.go.jp/dspace/bitstream/10685/52/1/JICA-RI_WP_No.28_2011.pdf
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    Bibliographic Info

    Paper provided by JICA Research Institute in its series Working Papers with number 28.

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    Date of creation: 03 Mar 2011
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    Handle: RePEc:jic:wpaper:28

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    Keywords: Industrial Cluster ; Location choice ; Ethnicity ; Africa;

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    1. Ruan, Jianqing & Zhang, Xiaobo, 2008. "Finance and cluster-based industrial development in China:," IFPRI discussion papers 768, International Food Policy Research Institute (IFPRI).
    2. Barr, Abigail & Oduro, Abena, 2002. "Ethnic fractionalization in an African labour market," Journal of Development Economics, Elsevier, vol. 68(2), pages 355-379, August.
    3. Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
    4. LaFountain, Courtney, 2005. "Where do firms locate? Testing competing models of agglomeration," Journal of Urban Economics, Elsevier, vol. 58(2), pages 338-366, September.
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