Non-Farm Enterprises in Rural Africa : New Empirical Evidence
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World Bank Group, Washington, DC
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Although non-farm enterprises are
ubiquitous in rural Sub-Saharan Africa, little is yet known
about them. The motivation for households to operate
enterprises, how productive they are, and why they exit the
market are neglected questions. Drawing on the Living
Standards Measurement Study -- Integrated Surveys on
Agriculture and using discrete choice, selection model and
panel data estimators, this paper provide answers using data
from Ethiopia, Niger, Nigeria, Malawi, Tanzania, and Uganda.
The necessity to cope following shocks, seasonality in
agriculture, and household size can push rural households
into operating a non-farm enterprise. Households are also
pulled into entrepreneurship to exploit opportunities.
Access to credit and markets, household wealth, and the
education and age of the household head are positively
associated with the likelihood of operating an enterprise.
The characteristics are also associated with the type of
business activity a household operates. Rural and
female-headed enterprises and enterprises with young
enterprise owners are less productive than urban and
male-owned enterprises and enterprises with older owners.
Shocks have a negative association with enterprise operation
and productivity and a large share of rural enterprises does
not operate continuously over a year. Enterprises cease
operations because of low profits, a lack of finance, or the
effects of idiosyncratic shocks. Overall the findings are
indicative that rural enterprises are "small businesses
in a big continent" where large distances, rural
isolation, low population density, and farming risks limit
productivity and growth.
Palabras clave
ACCESS TO CREDIT, ACCESS TO FINANCE, ACCESS TO MARKETS, AGRICULTURAL ECONOMICS, AGRICULTURAL PRODUCTIVITY, AGRICULTURE ORGANIZATION, BANDWIDTH, BARGAINING, BARRIERS TO ENTRY, BIASES, BUSINESS ACTIVITIES, BUSINESS ACTIVITY, BUSINESS CLIMATE, BUSINESS ENVIRONMENT, BUSINESS OPPORTUNITIES, BUSINESS PERFORMANCE, BUSINESS VOLUME, CAPABILITIES, COLLATERAL, CONFLICT, CONSUMPTION SMOOTHING, CREDIT MARKETS, CREDIT PROVISION, CROP PRODUCTION, DATA ANALYSIS, DATA MANIPULATION, DEVELOPMENT BANK, DEVELOPMENT ECONOMICS, DISCRIMINATION, DIVERSIFICATION, DIVISION OF LABOUR, EARNINGS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SHOCKS, ECONOMIC SYSTEMS, EDUCATIONAL ATTAINMENT, ELECTRICITY, EMPLOYMENT CREATION, ENTERPRISE SECTOR, ENTERPRISE SIZE, ENTERPRISE SURVEY, ENTERPRISE SURVEYS, ENTREPRENEURIAL SKILLS, ENTREPRENEURS, ENTREPRENEURSHIP, ENTREPRENEURSHIP DEVELOPMENT, EXPENDITURE, EXTERNAL SHOCKS, FAMILIES, FAMILY BUSINESSES, FARM ACTIVITIES, FARM EMPLOYMENT, FARM ENTERPRISE, FARM ENTERPRISES, FARM HOUSEHOLDS, FARM INCOME, FARMERS, FARMLAND, FEMALE ENTREPRENEURS, FEMALE LABOR, FEMALE PARTICIPATION, FINANCIAL ASSETS, FINANCIAL CONSTRAINTS, FINANCIAL MARKETS, FINANCIAL SUPPORT, FIRM SIZE, FIRMS, FOOD CONSUMPTION, FOOD EXPENDITURE, FOOD POLICY, FOOD SECURITY, FOOD SERVICES, FOOD SHORTAGE, GENDER, GOVERNMENT REGULATION, GREEN REVOLUTION, HOUSEHOLD CONSUMPTION, HOUSEHOLD DEMOGRAPHICS, HOUSEHOLD HEAD, HOUSEHOLD HEADS, HOUSEHOLD INCOME, HOUSEHOLD SIZE, HOUSEHOLDS, HUSBANDS, IDIOSYNCRATIC SHOCKS, INCOME ON FOOD, INDIVIDUAL ENTREPRENEUR, INEQUALITY, INFORMAL INSURANCE, INSURANCE MARKETS, INTERNATIONAL BANK, JOB CREATION, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR PRODUCTIVITY, LABOR SUPPLY, LACK OF EDUCATION, LACK OF FINANCE, LACK OF INFORMATION, LACK OF KNOWLEDGE, LIVING STANDARDS, LOCAL BUSINESS, LOCALIZATION, MANUFACTURING, MANUFACTURING ENTERPRISES, MARKET ACCESS, MARKET FAILURES, MATERIAL, MEDIUM ENTERPRISES, MICRO ENTERPRISES, MOTIVATION, NATURAL RESOURCES, NEW BUSINESS, NUTRITION, OCCUPATIONS, OPEN ACCESS, OPPORTUNITY COSTS, POLITICAL ECONOMY, POOR, POOR HOUSEHOLDS, POVERTY REDUCTION, PRICE INFORMATION, PRODUCTIVE ENTERPRISES, PRODUCTIVITY, PRODUCTIVITY GROWTH, PROFITABILITY, RATES OF RETURNS, RESULT, RESULTS, RETAIL PRICES, RETIREMENT, RISK FACTORS, RURAL, RURAL AREAS, RURAL DEVELOPMENT, RURAL EMPLOYMENT, RURAL ENTERPRISES, RURAL FEMALE, RURAL HOUSEHOLD, RURAL HOUSEHOLDS, RURAL INCOME, RURAL LABOR, RURAL MARKET, RURAL POVERTY, SELF-EMPLOYMENT, SMALL BUSINESS, SMALL BUSINESSES, SOCIAL NETWORKS, SOCIAL SECURITY, START-UP, START-UP COSTS, TECHNICAL ISSUES, TECHNICAL SKILLS, TRADE SALES, TRANSITION ECONOMIES, URBAN AREA, URBAN AREAS, USES, VILLAGE, WAGES, WOMAN