Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania
AbstractThis paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, the we describe a low-return sector struggling to compete in a challenging business environment. However, about one-third of rural enterprises are growing fast. Most enterprises engage in agricultural trade. Due to a rapidly growing agricultural sector in recent years, limiting demand-side constraints, rural enterprise constraints in Tanzania mainly operate from the supply side, suggesting that in particular access to finance, road infrastructure, and rural cell phone communication is associated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. We discuss a number of factors that would help to unleash the full potential of private sector-led growth in rural areas. Marginal improvements in the rural investment climate matter for growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25894.
Date of creation: 08 Mar 2010
Date of revision:
Publication status: Published in African Development Review 22.1(2010): pp. 173-207
Labor markets; rural investment climate; enterprise growth; Tanzania;
Other versions of this item:
- Tidiane Kinda & Josef L. Loening, 2010. "Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania," African Development Review, African Development Bank, vol. 22(1), pages 173-207.
- Kinda, Tidiane & Loening, Josef L., 2008. "Small enterprise growth and the rural investment climate : evidence from Tanzania," Policy Research Working Paper Series 4675, The World Bank.
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
This paper has been announced in the following NEP Reports:
- NEP-AFR-2010-10-23 (Africa)
- NEP-ALL-2010-10-23 (All new papers)
- NEP-ENT-2010-10-23 (Entrepreneurship)
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