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 authors describe a low-return sector struggling to compete in a difficult 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. This suggests that, in particular, access to finance, road infrastructure, and rural cell phone communication is correlated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. The authors discuss a number of factors that would help to unleash the full potential of private sector-led growth in rural areas. The findings show that marginal improvements in the rural investment climate matter for growth.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4675.
Date of creation: 01 Jul 2008
Date of revision:
Access to Finance; Rural Poverty Reduction; Microfinance; Banks&Banking Reform;
Other versions of this item:
- Tidiane Kinda & Josef 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, 2010. "Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania," MPRA Paper 25894, University Library of Munich, Germany.
- 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-AGR-2008-09-13 (Agricultural Economics)
- NEP-ALL-2008-09-13 (All new papers)
- NEP-DEV-2008-09-13 (Development)
- NEP-ENT-2008-09-13 (Entrepreneurship)
- NEP-MFD-2008-09-13 (Microfinance)
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