Description: Non-Farm Enterprises in Rural Africa : New Empirical Evidence

Non-Farm Enterprises in Rural Africa : New Empirical Evidence

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 o...

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Bibliographic Details
Main Authors:	Nagler, Paula, Naude, Wim
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	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
Online Access:	http://documents.worldbank.org/curated/en/2014/10/20299299/non-farm-enterprises-rural-africa-new-empirical-evidence http://hdl.handle.net/10986/20512

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Summary:	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.

Non-Farm Enterprises in Rural Africa : New Empirical Evidence

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