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Business incomes in rural Nicaragua: the role of household resources, location, experience and trust

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  • Marijke D’haese
  • Marieke De Ruijter De Wildt
  • Ruerd Ruben

Abstract

This paper analyses the determinants of business income for rural households in Nicaragua. A sample of 1030 households was studied in order to assess the importance of material and behavioural factors that influence income from business activity. The households are involved in manufacturing, trade, services or have a mixture of businesses. They generally have a low income and asset value. Households supplement their income from wages and agricultural activities. To estimate non-farm business income per employed person we analyse the impact of resources, location, entrepreneurial experience and trust. Our results show that household resources and entrepreneurial experience are significant determinants for business income in all sectors. Trust is also important, particularly generalized trust. The contribution of other forms of trust, such as institutional trust, depends on the sector in which households participate.

Suggested Citation

  • Marijke D’haese & Marieke De Ruijter De Wildt & Ruerd Ruben, 2008. "Business incomes in rural Nicaragua: the role of household resources, location, experience and trust," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 20(4), pages 345-366, July.
    • Handle: RePEc:taf:entreg:v:20:y:2008:i:4:p:345-366
    DOI: 10.1080/08985620701868231
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    References listed on IDEAS

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    1. Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966.
    2. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364, April.
    3. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302, May.
    4. Stephen Knowles, 2006. "Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?," WIDER Working Paper Series RP2006-25, World Institute for Development Economic Research (UNU-WIDER).
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