Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania

Tidiane Kinda and Josef Loening

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, the 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 in the rural investment climate matter for growth.

Keywords: Labor markets; rural investment climate; enterprise growth; Tanzania (search for similar items in EconPapers)
JEL-codes: J08 L25 O55 (search for similar items in EconPapers)
Date: 2010-03-08
New Economics Papers: this item is included in nep-afr and nep-ent
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Citations: View citations in EconPapers (14)

Published in African Development Review 22.1(2010): pp. 173-207

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Related works:
Journal Article: Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania (2010)
Working Paper: Small Enterprise Growth and the Rural Investment Climate: Evidence from Tanzania (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:25894

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