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Value Added of Cluster Membership for Micro Enterprises of the Handloom Sector in Ethiopia


  • Ali, Merima
  • Peerlings, Jack


Summary By contrasting the performance of clustered micro enterprises with that of dispersed ones in the handloom sector in Ethiopia, this study shows that clustering significantly increases profit. To correct for selection bias, we match clustered and dispersed micro enterprises that share similar observable characteristics except for being clustered both in urban and rural areas. Results show that clustering is more profitable in urban than rural areas. It is also found that regional-specific factors determining clustering of micro enterprises are different in urban and rural areas, highlighting the need to focus on local circumstances when formulating policies to promote clusters.

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  • Ali, Merima & Peerlings, Jack, 2011. "Value Added of Cluster Membership for Micro Enterprises of the Handloom Sector in Ethiopia," World Development, Elsevier, vol. 39(3), pages 363-374, March.
  • Handle: RePEc:eee:wdevel:v:39:y:2011:i:3:p:363-374

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    References listed on IDEAS

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    Cited by:

    1. Jörg Peters & Maximiliane Sievert & Christoph Strupat, 2015. "Impacts of a Micro-Enterprise Clustering Programme on Firm Performance in Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(1), pages 99-121, January.
    2. Philippe Simon, 2016. "Regulatory and economic instruments (REI) to benefit the development of MSEs in Haiti
      [Instruments économiques et règlementaires (IER) au profit du développement des TPE en Haïti]
      ," Working Papers hal-01292918, HAL.
    3. Nilsson, Pia, 2017. "Assessing the Role of Land Use Consolidation for Consumption Growth in Rwanda," Working Paper Series in Economics and Institutions of Innovation 455, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    4. Wim Naudé, 2016. "Entrepreneurship and the Reallocation of African Farmers," Agrekon, Taylor & Francis Journals, vol. 55(1-2), pages 1-33, June.
    5. 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.
    6. Jörg Peters & Maximiliane Sievert & Christoph Strupat, 2013. "Impacts of a Micro-Enterprise Clustering Program on Firm Performance in Ghana," Ruhr Economic Papers 0407, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    7. repec:zbw:rwirep:0407 is not listed on IDEAS
    8. Owoo, Nkechi S. & Naudé, Wim, 2014. "Non-Farm Enterprise Productivity and Spatial Autocorrelation in Rural Africa: Evidence from Ethiopia and Nigeria," IZA Discussion Papers 8295, Institute for the Study of Labor (IZA).
    9. Nagler, Paula & Naudé, Wim, 2014. "Labor Productivity in Rural African Enterprises: Empirical Evidence from the LSMS-ISA," IZA Discussion Papers 8524, Institute for the Study of Labor (IZA).
    10. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2017. "Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach," IDE Discussion Papers 666, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    11. Nagler, Paula & Naude, Wim, 2014. "Non-farm enterprises in rural Africa : new empirical evidence," Policy Research Working Paper Series 7066, The World Bank.

    More about this item


    cluster micro enterprises propensity score matching; handloom Africa Ethiopia;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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