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Mind the Gap? A Rural-Urban Comparison of Manufacturing Firms

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dc.contributor.authorSoderbom, Mans
dc.contributor.authorRijkers, Bob
dc.contributor.authorLoening, Josef
dc.date.accessioned2012-03-19T19:10:41Z
dc.date.available2012-03-19T19:10:41Z
dc.date.issued2009-06-01
dc.description.abstractThis paper compares and contrasts the performance of rural and urban manufacturing firms in Ethiopia to assess the impact of market integration and the investment climate on firm performance. Rural firms are shown to operate in isolated markets, have poor access to infrastructure and a substantial degree of market power, whereas urban firms operate in better integrated and more competitive markets, where they have much better access to inputs. Fragmentation may also help explain why urban firms are much larger, much more capital intensive and why they produce much more output per worker. Capital intensity and labor productivity are strongly correlated with firm size. Manufacturing technology choice does not vary strongly across space and increasing returns to scale are modest at best, suggesting that rural-urban differences in output per worker are predominantly driven by differences in capital intensity and Total Factor Productivity (TFP). The average TFP of firms in rural towns is much higher than that of rural firms in remote areas, but small firms in rural towns are not significantly less productive than small firms in other urban areas. A key finding of the paper is that market fragmentation and investment climate constraints impair the growth of the rural non-farm sector. Whereas urban firms exhibit a healthy dynamism, rural firms are stagnant and lack incentives to invest. Paradoxically, limited local demand due to market fragmentation is the most pressing constraint for rural firms, even though they face more severe supply-side constraints than urban firms. Promoting market towns in Ethiopia might be an effective means of capitalizing on the gains from market integration.en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090601131719
dc.identifier.doi10.1596/1813-9450-4946
dc.identifier.urihttps://hdl.handle.net/10986/4141
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research working paper ; no. WPS 4946
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO CREDIT
dc.subjectACCESS TO FINANCE
dc.subjectACCESS TO FINANCING
dc.subjectACCESS TO INFORMATION
dc.subjectACCESS TO MARKETS
dc.subjectAGGLOMERATION EFFECTS
dc.subjectAGRICULTURAL ECONOMICS
dc.subjectAGRICULTURE
dc.subjectBANK LOAN
dc.subjectBANK POLICY
dc.subjectBANKS
dc.subjectBIASES
dc.subjectBORROWER
dc.subjectBORROWING
dc.subjectBUSINESS ENVIRONMENT
dc.subjectBUSINESS ENVIRONMENTS
dc.subjectBUSINESS LOCATION
dc.subjectBUYERS
dc.subjectCAPITAL STOCK
dc.subjectCOLLATERAL
dc.subjectCOMMERCIAL FINANCE
dc.subjectCOMPETITIVE MARKETS
dc.subjectCOMPETITORS
dc.subjectCONSTANT RETURNS TO SCALE
dc.subjectCONSUMERS
dc.subjectCORRUPTION
dc.subjectCREDIT CONSTRAINTS
dc.subjectCUSTOMS CLEARANCE
dc.subjectDEPRECIATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT BANK
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDIVERSIFICATION
dc.subjectDUMMY VARIABLE
dc.subjectECONOMETRICS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC GEOGRAPHY
dc.subjectECONOMIC INTEGRATION
dc.subjectECONOMIC MANAGEMENT
dc.subjectECONOMIC OUTCOMES
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC POLICY
dc.subjectECONOMIC REFORM
dc.subjectECONOMIES OF SCALE
dc.subjectEDUCATIONAL ATTAINMENT
dc.subjectEMPLOYEE
dc.subjectEMPLOYMENT GROWTH
dc.subjectEMPLOYMENT OPPORTUNITIES
dc.subjectENGEL CURVES
dc.subjectENTERPRISE GROWTH
dc.subjectENTERPRISE PERFORMANCE
dc.subjectENTERPRISE REGISTRATION
dc.subjectENTREPRENEURSHIP
dc.subjectEQUALITY
dc.subjectEQUIPMENT
dc.subjectEXPANSION
dc.subjectEXPENDITURE
dc.subjectEXPORTER
dc.subjectEXTERNALITIES
dc.subjectFARM ENTERPRISE
dc.subjectFARM ENTERPRISES
dc.subjectFARM INCOME
dc.subjectFARMERS
dc.subjectFINANCIAL CONSTRAINTS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL SERVICES
dc.subjectFINANCIAL SUPPORT
dc.subjectFIRM PERFORMANCE
dc.subjectFIRM SIZE
dc.subjectFOREIGN COMPANIES
dc.subjectFOREIGN INVESTMENT
dc.subjectFORMAL CREDIT
dc.subjectFORMAL FINANCIAL INSTITUTIONS
dc.subjectFORMAL LENDING
dc.subjectFULL-TIME EMPLOYEE
dc.subjectFULL-TIME EMPLOYEES
dc.subjectGENDER
dc.subjectGOVERNMENT POLICY
dc.subjectGOVERNMENT REGULATION
dc.subjectGROUP OF FIRMS
dc.subjectGROWTH RATE
dc.subjectINCOME
dc.subjectINCOME INEQUALITY
dc.subjectINCREASING RETURNS
dc.subjectINCREASING RETURNS TO SCALE
dc.subjectINEQUALITY
dc.subjectINFLATIONARY PRESSURE
dc.subjectINFORMAL CREDIT
dc.subjectINFRASTRUCTURE DEVELOPMENT
dc.subjectINPUT PRICES
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL TRADE
dc.subjectINVESTMENT CLIMATE
dc.subjectINVESTMENT CLIMATE ASSESSMENT
dc.subjectINVESTMENT CLIMATE ASSESSMENTS
dc.subjectJOB CREATION
dc.subjectKNOWLEDGE GAP
dc.subjectLABOR FORCE
dc.subjectLACK OF COMPETITION
dc.subjectLAND MARKETS
dc.subjectLAND REGISTRATION
dc.subjectLARGE ENTERPRISES
dc.subjectLARGE FIRMS
dc.subjectLEVIES
dc.subjectLICENSING
dc.subjectLITERACY
dc.subjectLITERACY PROGRAM
dc.subjectLOAN
dc.subjectLOCAL MARKET
dc.subjectLOCAL MARKETS
dc.subjectLOW INCOME
dc.subjectLOWER INTEREST RATES
dc.subjectMACROECONOMIC INSTABILITY
dc.subjectMACROECONOMICS
dc.subjectMANUFACTURERS
dc.subjectMANUFACTURING ENTERPRISES
dc.subjectMARKET FRAGMENTATION
dc.subjectMARKET INTEGRATION
dc.subjectMARKET SHARES
dc.subjectMARKET SIZE
dc.subjectMEDIUM ENTERPRISES
dc.subjectMEDIUM-SIZED ENTERPRISE DEVELOPMENT
dc.subjectMFI
dc.subjectMICROENTERPRISES
dc.subjectOVERDRAFT
dc.subjectOVERDRAFT FACILITY
dc.subjectPERMANENT WORKERS
dc.subjectPOLITICAL ECONOMY
dc.subjectPOOR ACCESS
dc.subjectPOOR GROWTH PERFORMANCE
dc.subjectPRESENT VALUE
dc.subjectPRICE LEVELS
dc.subjectPROBABILITY
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION FUNCTIONS
dc.subjectPRODUCTIVE ENTERPRISES
dc.subjectPRODUCTIVITY
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPUBLIC GOODS
dc.subjectQUESTIONNAIRE
dc.subjectQUESTIONNAIRES
dc.subjectRECENT LOAN
dc.subjectRENTS
dc.subjectRURAL MARKETS
dc.subjectSALE
dc.subjectSECONDARY SCHOOL
dc.subjectSMALL ENTERPRISE
dc.subjectSMALL ENTERPRISES
dc.subjectSMALL FIRMS
dc.subjectSTART-UP
dc.subjectSUPPLIERS
dc.subjectTAX
dc.subjectTAX RATES
dc.subjectTAXATION
dc.subjectTELECOMMUNICATIONS
dc.subjectTHIN MARKETS
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectTRANSACTION
dc.subjectTRANSACTION COSTS
dc.subjectUNEMPLOYMENT
dc.subjectURBAN AREA
dc.subjectURBAN AREAS
dc.subjectVALUE ADDED
dc.subjectWAGE
dc.subjectWOMAN
dc.titleMind the Gap? A Rural-Urban Comparison of Manufacturing Firmsen
dspace.entity.typePublication
okr.crossref.titleMind The Gap? A Rural-Urban Comparison Of Manufacturing Firms
okr.date.doiregistration2025-04-10T12:16:48.305591Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090601131719
okr.guid845891468323976200
okr.identifier.doi10.1596/1813-9450-4946
okr.identifier.externaldocumentum000158349_20090601131719
okr.identifier.internaldocumentum10619900
okr.identifier.reportWPS4946
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2009/06/01/000158349_20090601131719/Rendered/PDF/WPS4946.pdfen
okr.region.administrativeThe World Region
okr.region.administrativeThe World Region
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublicatione2023549-6161-5735-a342-0381b2b7571a
relation.isAuthorOfPublication.latestForDiscoverye2023549-6161-5735-a342-0381b2b7571a
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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