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Non-farm entrepreneurship in rural sub-Saharan Africa: New empirical evidence

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  • Nagler, Paula
  • Naudé, Wim

Abstract

We report on the prevalence and patterns of non-farm enterprises in six sub-Saharan African countries, and study their performance in terms of labor productivity, survival and exit, using the World Bank’s Living Standards Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA). Rural households operate enterprises due to both push and pull factors and tend to do so predominantly in easy-to-enter activities, such as sales and trade, rather than in activities that require higher starting costs, such as transport services, or educational investment, such as professional services. Labor productivity differs widely: rural and female-headed enterprises, those located further away from population centers, and businesses that operate intermittently have lower levels of labor productivity compared to urban and male-owned enterprises, or enterprises that operate throughout the year. Finally, rural enterprises exit the market primarily due to a lack of profitability or finance, and due to idiosyncratic shocks.

Suggested Citation

  • Nagler, Paula & Naudé, Wim, 2017. "Non-farm entrepreneurship in rural sub-Saharan Africa: New empirical evidence," Food Policy, Elsevier, vol. 67(C), pages 175-191.
    • Handle: RePEc:eee:jfpoli:v:67:y:2017:i:c:p:175-191
    DOI: 10.1016/j.foodpol.2016.09.019
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    More about this item

    Keywords

    Entrepreneurship; Enterprise performance; Informal sector; Rural development; Self-employment; Small businesses; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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