University of Illinois Urbana-Champaign

Micro- and small-enterprise dynamism and consumer impacts: evidence from Tanzania

Naugler, Alix Nichole

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https://hdl.handle.net/2142/121194

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Title
Micro- and small-enterprise dynamism and consumer impacts: evidence from Tanzania
Author(s)
Naugler, Alix Nichole
Issue Date
2023-05-25
Director of Research (if dissertation) or Advisor (if thesis)
  • Janzen, Sarah
  • Michelson, Hope
Committee Member(s)
Ridley, William
Department of Study
Agr & Consumer Economics
Discipline
Agricultural & Applied Econ
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
M.S.
Degree Level
Thesis
Keyword(s)
  • Agro-dealers
  • micro- and small-enterprises
  • firm dynamism
  • farmer technology adoption
  • agricultural inputs
  • Tanzania
  • farmer beliefs
  • firm survival
Abstract
Agro-dealers are a class of micro- and small-enterprises (MSEs) that provides access to agricultural inputs and information to small-holder farmers in low-income countries. This paper uses data from Tanzania’s Morogoro Region to analyze agro-dealer dynamism (i.e., rates of entry and exit) and its impacts on consumers. I estimate an annual firm exit and entry rate of 18.1 and 34.0 percent, respectively, between 2015 and 2020. These rates are considerably higher than those documented in other studies analyzing MSE dynamism in low-income countries. Yet they are comparable to rates for agro-dealer sectors in Sub-Saharan African countries. I find that agro-dealers do not enter the market as a temporary coping strategy in response to shocks. Moreover, I find that agro-dealers exit because they are losing profits rather than graduating to more lucrative opportunities. These findings contradict common hypotheses in the literature. I establish agro-dealer dynamism affects small-holder farmer beliefs regarding product quality attributes in the market. Farmer concern about agricultural input quality increases in the presence of high agro-dealer entry and decreases in the presence of high agro-dealer exit. Results suggest excessive firm dynamism in this agro-dealer market could constrain farmer technology adoption.
Graduation Semester
2023-08
Type of Resource
Thesis
Copyright and License Information
Copyright 2023 Alix Naugler

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