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The development process of rural informal industries in developing countries: the case of Bangladesh

Author

Listed:
  • Khondoker Abdul Mottaleb
  • Tetsushi Sonobe

    (International Rice Research Institute, The Philippines
    GRIPS, Minato-ku, Japan)

Abstract

While the role of rural informal industrial clusters in generating income and employment opportunities for the rural poor is widely acknowledged, studies seldom examine the growth process of informal industries in developing countries. Particularly, studies seldom examine why many of the informal industrial clusters in developing countries perform poorly relative to their growth potential. Using primary data collected from entrepreneurs and workers from an informal hosiery cluster in a northern district in Bangladesh, this paper explains the factors that influence the development process of informal industries in rural areas in developing countries. The paper empirically identifies that entrepreneurs’ human capital acquired through formal education critically determines product quality upgrading efforts, formal credit accessibility by the entrepreneurs, and the performance of enterprises.

Suggested Citation

  • Khondoker Abdul Mottaleb & Tetsushi Sonobe, 2013. "The development process of rural informal industries in developing countries: the case of Bangladesh," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(2), pages 229-249, July-Dece.
    • Handle: RePEc:jda:journl:vol.47:year:2013:issue2:pp:229-249
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    Citations

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    Cited by:

    1. Khondoker Abdul Mottaleb & Dil Bahadur Rahut, 2019. "Impacts of Improved Infrastructure on Labor Allocation and Livelihoods: The Case of the Jamuna Multipurpose Bridge, Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 750-778, September.
    2. Surender Mor & Sonu Madan & Geoffrey R. Archer & Arvind Ashta, 2020. "Survival of the Smallest: A Study of Microenterprises in Haryana, India," Millennial Asia, , vol. 11(1), pages 54-78, April.
    3. Mohamedou Bouasria & Arvind Ashta & Zaka Ratsimalahelo, 2020. "Bottlenecks to Financial Development, Financial Inclusion, and Microfinance: A Case Study of Mauritania," JRFM, MDPI, vol. 13(10), pages 1-28, October.
    4. Masoumeh Ghorbani & Thomas Brenner, 2021. "Prerequisites and initial developments for economic specialization in lagging regions—A study of specialized villages in Iran," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 41(2), pages 229-268, October.

    More about this item

    Keywords

    Informal sector; industrial development; human capital;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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