Critical Assessment of the Socio-Economic Impacts and Determinants of Micro and Small Enterprises (A Case Study on Wolkite Town)
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Date
2009-05
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A.A.U
Abstract
This study in vesti gates the soc io-economic impacts and determinants (constraints) of MSEs
simultaneously using 100 samples of MSEs (80 of them so le propri etorship and 20 of th em cooperatives)
in Wolkite town (the case study area of this paper), The majority of firms in the
sun'eyed town (Wolkite town) are MSE and large numbers of the res idents made their I il'el ihood
through micro and small enterpri se, The fi nding of the study sholl's MSEs hale socio-economic
impacts such as employment opportunity. income generation and some other liwlihood bene fit s.
HOII·ever. there are some constraints or determinants that can affect fo r the groll th of VISEs such
as initial size and age of the firm. lo rmal ity of the bus iness. human cap ital(prel' ious e~pe ricn ce.
education level and business training). demographic factors (ge nder. martial status and age of' the
ollner), access to finance, the type of se ctor and location of the firm . Further more. the ana lys is
of the study also sholvs that from these determinants age of the finn. business formality. prev ious
e~pe ri e n ce . business training. demographic factor(ma le and married oll'ner).i nforma l linancial
access. the type of sec tor(trade and manufactur ing) and location of the I'irm(traditional market
location) have positive effect for the gro\\1h of MSEs, On the contrary. initial size of the firm.
lormal financial access. informality of the business. demographic factor( female and unmarried
ollner)and the tl'jJe of secto r(trade) halT nega ti ve effect for the groll·th of \ !SEs. Sincc MSE
differs based on sec tor and oll'l1ership type. their soc io-economic impact and the constraint thel'
do face also difkrs accordingly, Policies and support programme that promotes lor the growth of
\ ISEs therefo re should consider these aspec ts of MSEs difference s.
The paper compr ised of fi l'e sections. the fi rst sec tion deals lI'ith an introduction. the second
s<'ction rel'iell's the theoret ical literature. the third sec ti on discu sses the dcscri ptil'e anah si, of the
data. the fourth sec tion sets the empi ri cal framell'ork and su mnlaries the SUI'I 'CI regression res ults
ancithe lifth sec tion colers the conc lu sion and some polic" implicati on of the studl,
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Keywords
Employment Opportunit, Determinants or Constraints