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The Growth Barriers of Informal Sector Enterprises: Evidence from India

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  • Subash Sasidharan
  • S. N. Rajesh Raj

Abstract

type="main"> The present study investigates the growth barriers of informal sector enterprises in India. The empirical analysis is based on the National Sample Survey Organization's unit-level data for three years, 2000–2001, 2005–6, and 2010–11. The results of the study reveal: proprietary and large firms survive and grow; enterprises managed by women are less likely to decline; inadequate power supply poses a severe growth obstacle to all categories of firms; and proprietary firms encounter capital shortage while large firms are constrained by the non-availability of raw materials. We do not find evidence of sub-contracting acting as an enabling factor in firm growth.

Suggested Citation

  • Subash Sasidharan & S. N. Rajesh Raj, 2014. "The Growth Barriers of Informal Sector Enterprises: Evidence from India," The Developing Economies, Institute of Developing Economies, vol. 52(4), pages 351-375, December.
  • Handle: RePEc:bla:deveco:v:52:y:2014:i:4:p:351-375
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    2. Salmon Mugoda & Stephen Esaku & Rose Kibuka Nakimu & Edward Bbaale & Robert Read, 2020. "The portrait of Uganda’s informal sector: What main obstacles do the sector face?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1843255-184, January.
    3. BANERJI, Asit & GOTO, Jun & ISHIZAKI, Hironori & KUROSAKI, Takashi & LAL, Kaushalesh & PAUL, Shampa & SAWADA Yasuyuki & TSUDA, Shunsuke, 2018. "Entrepreneurship in Micro and Small Enterprises: Empirical Findings from Resurveys in Northeastern Areas of Delhi, India," Discussion paper series HIAS-E-65, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    4. Takashi Kurosaki, 2019. "Informality, Micro and Small Enterprises, and the 2016 Demonetisation Policy in India," Asian Economic Policy Review, Japan Center for Economic Research, vol. 14(1), pages 97-118, January.

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