The growth process of informal enterprises in Sub-Saharan Africa: a case study of a metalworking cluster in Nairobi
- 715 Downloads
Small and informal enterprises are preponderant in Africa’s manufacturing sector. Their growth is negligibly low except when young and small, but little is known beyond this. This paper reports the results of our field study of a metalworking cluster in Nairobi. As competition was intensified by the entry of new enterprises, the education level of entrepreneurs became important in determining enterprise performance, which is reminiscent of East Asian experiences. Recently, some enterprises have left for formal industrial areas partly because their original sites have become too congested for them to grow and partly because being formal facilitates marketing and further growth.
KeywordsAfrica Kenya Industrial development Informal sector Human capital
JEL ClassificationsO14 O33 O55 L26
This paper has benefited from the helpful comments and suggestions of an anonymous referee of this journal. Many thanks are also due to Paul Kandasamy for helping us editing the paper. Also financial support of the Global Center of Excellence project funded by the Ministry of Education and Science of the Japanese government is gratefully acknowledged.
- Davidson, R., & MacKinnon, J. G. (1993). Estimation and inference in econometrics. Oxford: Oxford University Press.Google Scholar
- Fafchamps, M. (2004). Market institutions in sub-Saharan Africa: Theory and evidence. Cambridge, MA: The MIT Press.Google Scholar
- Fafchamps, M., & Söderbom, M. (2006). Wages and labor management in African manufacturing. Journal of Human Resources, 41(2), 346–379.Google Scholar
- Humphrey, J. (2003). Opportunities for SMEs in developing countries to upgrade in a global economy. SEED working paper no. 43, International Labor Organization.Google Scholar
- Humphrey, J., & Schmitz, H. (2001). Governance in global value chains. IDS Bulletin 32.3, Institute of Development Studies.Google Scholar
- King, K. (1996). Jua Kali Kenya: Change & Development in an Informal Economy-1970/95. London: James Currey; Nairobi: East African Education Publisher; and Athens: Ohio University Press.Google Scholar
- Kinyanjui, N. (2007). The Kamukunji metalwork cluster in Kenya. In D. Z. Zeng (Ed.), Knowledge, technology, and cluster-based growth in Africa. Washington, DC: The World Bank, WBI Development Studies.Google Scholar
- Mbaku, J. M. (1996). Bureaucratic corruption in Africa: The futility of cleanups. Cato Journal, 16(1), 99–118.Google Scholar
- Sonobe, T., Akoten, J. E., & Otsuka, K. (2009a). An exploration into the successful development of the leather-shoe industry in Ethiopia. Review of Development Economics, forthcoming.Google Scholar
- Sonobe, T., Akoten J. E., & Otsuka, K. (2009b). The growth process of informal enterprises in a metalworking cluster in Nairobi. FASID discussion paper.Google Scholar