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Location Choice and Performance of Furniture Workshops in Arusha, Tanzania

Author

Listed:
  • Muto, Megumi
  • Yessica
  • Chung, C.Y.
  • Shimikoshi, Shinobu

Abstract

This study uses data collected in an emerging furniture cluster in the Tanzanian city of Arusha to investigate the determinants of location choice and location effect on the performance of micro and small furniture enterprises in Africa. Based on empirical analyses of a census of 234 workshops located in five sub-clusters, the results show that furniture producers tend to locate in sub-clusters where industrial peers from their own ethnic group have gathered. Meanwhile, the results, consistent with the literature on agglomeration economics, shows that entrepreneurs in Africa desire to locate in proximity to a large output market. However, performance analyses show that ethnic networks did not contribute to the performance of workshops as measured by DEA and product quality. In contrast, workshops located in sub-clusters with more machinery shops outperformed workshops located in sub-clusters with fewer machinery shops, implying that well-integrated upstream industries in the sub-cluster foster the development of the industry.

Suggested Citation

  • Muto, Megumi & Yessica & Chung, C.Y. & Shimikoshi, Shinobu, 2011. "Location Choice and Performance of Furniture Workshops in Arusha, Tanzania," Working Papers 28, JICA Research Institute.
    • Handle: RePEc:jic:wpaper:28
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    References listed on IDEAS

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    6. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
    7. Barr, Abigail & Oduro, Abena, 2002. "Ethnic fractionalization in an African labour market," Journal of Development Economics, Elsevier, vol. 68(2), pages 355-379, August.
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    Cited by:

    1. Fujita, Yasuo & Takeda, Asami, 2014. "Effects of Transport Corridor Development on Firms’ Locational Choice and Firms’ Perception of Business Environment: A Preliminary Analysis of Transport Corridors in Mozambique," Working Papers 74, JICA Research Institute.

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