Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda

Ishengoma, Esther K.; Kappel, Robert T.

doi:10.2139/ssrn.1136816

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Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda

GIGA Working Paper No. 78

29 Pages Posted: 26 May 2008 Last revised: 16 Aug 2012

See all articles by Esther K. Ishengoma

Esther K. Ishengoma

University of Dar es Salaam - Faculty of Commerce and Management

Robert T. Kappel

German Institute of Global and Area Studies (GIGA)

Date Written: May 1, 2008

Abstract

Ugandan micro- and small enterprises (MSEs) still perform poorly. The paper utilizes data collected in Uganda in March and April 2003 to analyze the business constraints faced by these MSEs. Using a stratified random sampling, a sample of 265 MSEs were interviewed. The study focuses on the 105 manufacturing firms that responded to all questions. It examines the extent to which the growth of MSEs is associated with business constraints, while also controlling for owners' attributes and firms' characteristics. The results reveal that MSEs' growth potential is negatively affected by limited access to productive resources (finance and business services), by high taxes, and by lack of market access.

Keywords: small enterprises, informal sector, growth, manufacturing, Uganda, productivity, business services

JEL Classification: D21, E26, G38, H25, L25, L26, L6, O12, O14

Suggested Citation: Suggested Citation

Ishengoma, Esther K. and Kappel, Robert T., Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda (May 1, 2008). GIGA Working Paper No. 78, Available at SSRN: https://ssrn.com/abstract=1136816 or http://dx.doi.org/10.2139/ssrn.1136816