Small enterprise growth and the rural investment climate : evidence from Tanzania
This 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.
|Date of creation:||01 Jul 2008|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lanjouw, Peter & Quizon, Jaime & Sparrow, Robert, 2001. "Non-agricultural earnings in peri-urban areas of Tanzania: evidence from household survey data," Food Policy, Elsevier, vol. 26(4), pages 385-403, August.
- Sleuwaegen, Leo & Goedhuys, Micheline, 2002. "Growth of firms in developing countries, evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 68(1), pages 117-135, June.
- Ellis, Frank & Mdoe, Ntengua, 2003. "Livelihoods and Rural Poverty Reduction in Tanzania," World Development, Elsevier, vol. 31(8), pages 1367-1384, August.
- Evans, David S., 1986.
"Tests of Alternative Theories of Firm Growth,"
86-36, C.V. Starr Center for Applied Economics, New York University.
- Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2008.
"How Important Are Financing Constraints? The Role of Finance in the Business Environment,"
World Bank Economic Review,
World Bank Group, vol. 22(3), pages 483-516, November.
- Ayyagari, Meghana & Demirguc-Kunt, Asli & Maksimovic, Vojislav, 2006. "How important are financing constraints ? The role of finance in the business environment," Policy Research Working Paper Series 3820, The World Bank.
- Loening, Josef & Rijkers, Bob & Soderbom, Mans, 2008. "Nonfarm microenterprise performance and the investment climate : evidence from rural Ethiopia," Policy Research Working Paper Series 4577, The World Bank.
- Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
- Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
- Fisman, Raymond & Svensson, Jakob, 2000.
"Are corruption and taxation really harmful to growth? - firm-level evidence,"
Policy Research Working Paper Series
2485, The World Bank.
- Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
- Dollar, David & Hallward-Driemeier, Mary & Mengistae, Taye, 2005. "Investment Climate and Firm Performance in Developing Economies," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 131-131, October.
- Bigsten, Arne & Soderbom, Mans, 2005.
"What have we learned from a decade of manufacturing enterprise surveys in Africa ?,"
Policy Research Working Paper Series
3798, The World Bank.
- Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," World Bank Research Observer, World Bank Group, vol. 21(2), pages 241-265.
- Jin, Songqing & Deininger, Klaus W. & Sur, Mona, 2005.
"Sri Lanka's Rural Non-farm Economy: Removing Constraints to Pro-poor Growth,"
2005 Annual meeting, July 24-27, Providence, RI
19280, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Deininger, Klaus & Jin, Songqing & Sur, Mona, 2007. "Sri Lanka's Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth," World Development, Elsevier, vol. 35(12), pages 2056-2078, December.
- Pablo Fajnzylber & William Maloney & Gabriel Montes Rojas, 2006. "Microenterprise Dynamics in Developing Countries: How Similar are They to Those in the Industrialized World? Evidence from Mexico," World Bank Economic Review, World Bank Group, vol. 20(3), pages 389-419.
- Simon Johnson & John McMillan & Christopher Woodruff, 2002.
"Property Rights and Finance,"
NBER Working Papers
8852, National Bureau of Economic Research, Inc.
- McPherson, Michael A., 1996. "Growth of micro and small enterprises in southern Africa," Journal of Development Economics, Elsevier, vol. 48(2), pages 253-277, March.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4675. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.