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Non-farm entrepreneurship in rural sub-Saharan Africa: New empirical evidence

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ABSTRACT

We report on the prevalence and patterns of non-farm enterprises in six sub-Saharan African countries, and study their performance in terms of labor productivity, survival and exit, using the World Bank’s Living Standards Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA). Rural households operate enterprises due to both push and pull factors and tend to do so predominantly in easy-to-enter activities, such as sales and trade, rather than in activities that require higher starting costs, such as transport services, or educational investment, such as professional services. Labor productivity differs widely: rural and female-headed enterprises, those located further away from population centers, and businesses that operate intermittently have lower levels of labor productivity compared to urban and male-owned enterprises, or enterprises that operate throughout the year. Finally, rural enterprises exit the market primarily due to a lack of profitability or finance, and due to idiosyncratic shocks.

No MeSH data available.


Productivity dispersal – by gender. Note(s): In (a)–(d) the continuous lines represent the productivity of enterprises with a female enterprise owner and the dotted lines the productivity of enterprises with a male enterprise owner. Authors’ own calculations based on LSMS-ISA data.
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f0035: Productivity dispersal – by gender. Note(s): In (a)–(d) the continuous lines represent the productivity of enterprises with a female enterprise owner and the dotted lines the productivity of enterprises with a male enterprise owner. Authors’ own calculations based on LSMS-ISA data.

Mentions: We further depict the productivity dispersal by gender, education (proxied by the ability to read and write) and the experience of shocks in Fig. 7, Fig. 8, Fig. 9.11 Enterprises with a male owner are on average more productive than enterprises with a female owner in all four countries. A possible explanation could lie in the fact that businesses are time-consuming to operate, and women tend to be more time-constrained due to household duties (see also Palacios-LĂłpez and LĂłpez, 2014). The productivity dispersal by the ability to read and write shows that literate enterprise owners operate more productive enterprises. However, the ability to read and write is an imprecise approximation to the educational level of the entrepreneur, capturing individuals with primary education, but also individuals with more comprehensive education, for example secondary schooling. However, given that we expect managerial capacity to be important for enterprise productivity (see e.g. Sonobe et al., 2012), the results provide some support in this regard.


Non-farm entrepreneurship in rural sub-Saharan Africa: New empirical evidence
Productivity dispersal – by gender. Note(s): In (a)–(d) the continuous lines represent the productivity of enterprises with a female enterprise owner and the dotted lines the productivity of enterprises with a male enterprise owner. Authors’ own calculations based on LSMS-ISA data.
© Copyright Policy - CC BY
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC5384454&req=5

f0035: Productivity dispersal – by gender. Note(s): In (a)–(d) the continuous lines represent the productivity of enterprises with a female enterprise owner and the dotted lines the productivity of enterprises with a male enterprise owner. Authors’ own calculations based on LSMS-ISA data.
Mentions: We further depict the productivity dispersal by gender, education (proxied by the ability to read and write) and the experience of shocks in Fig. 7, Fig. 8, Fig. 9.11 Enterprises with a male owner are on average more productive than enterprises with a female owner in all four countries. A possible explanation could lie in the fact that businesses are time-consuming to operate, and women tend to be more time-constrained due to household duties (see also Palacios-LĂłpez and LĂłpez, 2014). The productivity dispersal by the ability to read and write shows that literate enterprise owners operate more productive enterprises. However, the ability to read and write is an imprecise approximation to the educational level of the entrepreneur, capturing individuals with primary education, but also individuals with more comprehensive education, for example secondary schooling. However, given that we expect managerial capacity to be important for enterprise productivity (see e.g. Sonobe et al., 2012), the results provide some support in this regard.

View Article: PubMed Central - PubMed

ABSTRACT

We report on the prevalence and patterns of non-farm enterprises in six sub-Saharan African countries, and study their performance in terms of labor productivity, survival and exit, using the World Bank’s Living Standards Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA). Rural households operate enterprises due to both push and pull factors and tend to do so predominantly in easy-to-enter activities, such as sales and trade, rather than in activities that require higher starting costs, such as transport services, or educational investment, such as professional services. Labor productivity differs widely: rural and female-headed enterprises, those located further away from population centers, and businesses that operate intermittently have lower levels of labor productivity compared to urban and male-owned enterprises, or enterprises that operate throughout the year. Finally, rural enterprises exit the market primarily due to a lack of profitability or finance, and due to idiosyncratic shocks.

No MeSH data available.