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, we describe a low-return sector struggling to compete in a challenging 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, suggesting that in particular access to finance, road infrastructure and rural cell phone communication is associated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. We discuss a number of factors that would help to unleash the full potential of private sector-led growth in rural areas. Marginal improvements of the rural investment climate matter for growth.
| Main Authors: | , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2010
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| Subjects: | Capital Budgeting, Fixed Investment and Inventory Studies G310, National Government Expenditures and Related Policies: Infrastructures, Other Public Investment and Capital Stock H540, Firm Performance: Size, Diversification, and Scope L250, Economic Development: Financial Markets, Saving and Capital Investment, Corporate Finance and Governance O160, Economic Development: Regional, Urban, and Rural Analyses, Transportation O180, Transportation Systems: Government and Private Investment Analysis, Road Maintenance, Transportation Planning R420, |
| Online Access: | http://hdl.handle.net/10986/4633 |
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