Nonfarm Microenterprise Performance and the Investment Climate : Evidence from Rural Ethiopia
This paper uses uniquely matched household, enterprise and community survey data from four major regions in rural Ethiopia to characterize the performance, constraints and opportunities of nonfarm enterprises. The nonfarm enterprise sector is sizea...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/03/9161814/nonfarm-microenterprise-performance-investment-climate-evidence-rural-ethiopia http://hdl.handle.net/10986/6506 |
| Summary: | This paper uses uniquely matched
household, enterprise and community survey data from four
major regions in rural Ethiopia to characterize the
performance, constraints and opportunities of nonfarm
enterprises. The nonfarm enterprise sector is sizeable,
particularly important for women, and plays an important
role during the low season for agriculture, when alternative
job opportunities are limited. Returns to nonfarm enterprise
employment are low on average and especially so for
female-headed enterprises. Women nevertheless have much
higher participation rates than men, which attest to their
marginalized position in the labor market. Most enterprises
are very small and rely almost exclusively on household
members to provide the required labor inputs. Few firms add
to their capital stock or increase their labor inputs after
startup. Local fluctuations in predicted crop performance
affect the performance of nonfarm enterprises, because of
the predominant role played by the agricultural sector.
Enterprise performance is also affected by the localized
nature of sales and limited market integration for nonfarm
enterprises. The policy implications of these and other
findings are discussed. |
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