10Mar 2020

CONSTRAINTS OF SMES IN WEST AFRICA: THE CASE OF COTE DIVOIRE AFTER THE CRISIS

Crossref Cited-by Linking logo

  • Abstract
  • References
  • Cite This Article as
  • Corresponding Author

Small and Medium Enterprises are the key factors of the economic development in developing countries. It is therefore paramount to identify the major constraints they are confronted with. This paper highlights the constraints experienced by small and medium enterprises in Cote dIvoire from a collection of original data. An ordered probit analysis coupled with a Directed Acyclic Graph (DAG) show that the constraints on sales growth, as perceived by managers, differ according to the characteristics of the company. Also, the improved water supply and a straightforward building permit policy would allow companies to increase their profitability. Furthermore, a deterioration of access to funding has also lead to a massive decline in business sales. Our analysis confirmed the interrelationship between various constraints. Thus, a business climate marked by political instability and insecurity inevitably affects corruption. Then, political stability, reform in tax policy and a corruption-free environment are likely to improve the financial conditions of companies and promote the growth of business sales. Thus, all the reforms undertaken by the government of Cote dIvoire to improve the business climate must take into consideration the characteristics of companies as well as the interrelationship between the various obstacles they encounter.

  1. Alesina, A., &Perotti, R., (1996). Income Distribution, Political Instability, and Investment. EuropeanEconomic Review 40 (6), 1203-1228
  2. Alesina, A., Ozler, S., Roubini, N., &Swagel, P., (1996). Political instability and economic growth, Journal of Economic Growth 1 (2), 188?211.
  3. Ayyagari, M., Demirg??-Kunt, A., &Maksimovic, V., (2008). How well do Institutional theories Explain Firms Perceptions of Property Rights?,The Review of Financial Studies 21, 1833-1871
  4. Ayyagari, M., Demirg??-Kunt, A., &Maksimovic, V., (2013). What determines protection of property rights? An Analysis of Direct and Indirect Effects, Journal of Financial Econometrics 11(4), 610-649
  5. Banque Mondiale, (2015). La Force de lElephant: pour que sacroissanceg?n?re plus demploi dequalit?, s?rie Situation ?conomiqueen Cote dIvoire
  6. Batra, G., Kaufmann, D., & Stone, A., (2003). The Firms Speak: What the World Business Environment Survey Tells Us about Constraints on Private Sector Development. World Bank mimeo.
  7. Beck, T., Demirg??-Kunt, A., &Maksimovic, V., (2005). Financial and Legal Constraints to Firm Growth: Does Firm Size Matter. Journal of Finance 60(1), 137-177.
  8. Beck, T., Demirg??-Kunt, A., Laeven, L. & Levine, R., (2008). Finance, Firm Size, and Growth, Journalof Money, Credit, and Bnking40 (7), 1379-1405
  9. CEPICI (2015). Retrospective doing business 2015, newsletter novembre 2015
  10. Cull, R., & Xu, C. L., (2005). Institutions, ownership and finance: The determinants of profit reinvestment and Chinese firms. Journal of Financial Economics 77 (1), 117-146
  11. Desai, M., Dyck, A., &Zingales, L., (2007). Theft and Taxes, Journal of Financial Economics, 84, 591-623
  12. Desai, M., Foley, C.F., & Forbes, K. J., (2004). Financial Constraints and Growth: Multinational and Local Firm Responses to Currency Depreciations, SSRN Working Paper Series
  13. Dollar, D., Hallward-Driemeier, M., &Mengistae, T., (2005). Investment Climate and Firm Performance in Developing Economies, Economic Development and Cultural Change 54 (1), 1- 21.
  14. Dollar, D., Hallward-Driemeier, M., &Mengistae, T., (2006). Investment climate and internationalintegration, World Development, 34(9), 1498-1516, September.
  15. DSRP (2012), Strat?gie de Relance du D?veloppement et de R?duction de la Pauvret?, R?publique de Cote dIvoire
  16. Eifert, B., Gelb, A., Ramachandran, V., (2005). Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data, World Bank mimeo.
  17. Fisman, R., Svensson, J., (2004). Are Corruption and Taxation Really Harmful to Growth? Firm-Level Evidence. World Bank Policy Research Working Paper # 2485
  18. Fjose, S., Gr?nfeld, L. A. & Green, C. (2010). SMEs and growth in Sub-Saharan Africa : Identifying SME roles and obstacles to SME growth, MENON-publication no. 14/2010
  19. Friedman, E. S. Johnson, D. Kaufmann and P. Zoido-Lobaton (2000). Dodging the Grabbing Hand: The
  20. Determinants of Unofficial Activity in 69 Countries, Journal of Public Economics, Vol. 76: 459-493.
  21. Friedman, E., Johnson, S., Kaufmann, D., Zoido-Lobat?n, P., (2000). Dodging the grabbing hand: The determinants of unofficial activity in 69 countries. Journal of Public Economics 76,459-93.
  22. Gaviria, A., (2002). Assessing the Effects of Corruption and Crime on Firm Performance: Evidence from Latin America. Emerging Markets Review 3(3).
  23. GCCI (2016). Note sur lenvironnement des affaires encotedivoire, secr?tariat technique du Groupe Consultatif Plan National de D?veloppement 2016-2020, Cote dIvoire
  24. Herrington M, Kew J, Kew P (2009). Global Entrepreneurship Monitor, South African Report. [Online]. Available: http://www.gbs.nct.ac.za/gbswebb/userfiles/gemsouthafrica2000pdf
  25. ILO (2015). Small and medium-sized enterprises and decent and productive employment creation, Report IV, International Labour Conference, 104th Session, Geneva, 2015
  26. Johnson, S., McMillan, J., Woodruff, C., (2000). Entrepreneurs and the Ordering of Institutional Reform,? Economics of Transition, Vol. 8(1), 1?36.
  27. Johnson, S., Mitton, T., (2003). Cronyism and capital controls: evidence from Malaysia, Journal ofFinancial Economics 67, 351-382.
  28. Kalisch, M. &Buhlmann, P. (2007). Estimating High-Dimensional Directed Acyclic Graphs with the PC-Algorithm, Journal of Machine Learning Research 8, 613-636
  29. Kaufmann, D., A. Kraay and M. Mastruzzi. (2003). ?Governance Matters III: Governance Indicators for 1996-2002.? World Bank Policy Research Working Paper 3106. Washington DC: World Bank.
  30. Klapper, L., Laeven, L, Rajan, R., (2005). Barriers to Entrepreneurship. World Bank Mimeo.
  31. Kouadio, K., H., Soro, N., Gbenro, N., & Kanga, D. (2013). Climat des affaires Cote dIvoire 2012:M?thodologie et Outils de Collecte, Rapport d?tude, ENSEA
  32. Kouadio, Y.M. (2011) :Environnement des affaires et reliance ?conomique post-criseen Cote dIvoire, Universit?dAuvergne - CEFEB ?MatserEconomie et D?veloppement International
  33. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R.W., (1997). Legal determinants of external finance. Journal of Finance 52, 1131-1150.
  34. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R.W., (1998). Law and finance. Journal ofPolitical Economy 106, 1113-1155
  35. Levine, R., (2005). Finance and Growth: Theory and Evidence forthcoming in Philippe Aghion and Steven Durlauf, eds. Handbook of Economic Growth. The Netherlands: Elsevier Science.
  36. Marshal ML & Oliver WN (2005). The Effect of Human Financial and Social on Entrepreneurial Process for Entrepreneurs in India. Masters Thesis, Unpublished. Purdue: Purdue University.
  37. Mauro, P.,(1995). Corruption and growth, Quarterly Journal of Economics 110, 681-712. Minist?re de lEconomie et des Finances (2010). Annexe fiscal 2010, Abidjan Cote dIvoire
  38. ONUDI (2012). Nouvelle politique Industrielle de la Cote dIvoire, Vienne (Autriche)
  39. Pissarides, F., Singer, M., Svejnar, J., (2003). Objectives and Constraints of Entrepreneurs: Evidence from Small and Medium-Sized Enterprises in Russia and Bulgaria. Journal of Comparative Economics, Vol. 31(3), 503?531.
  40. Saleem, Q. (n.d.). Overcoming Constraints to SME Development in MENA Countries and EnhancingAccess to Finance. International Finance Corporation, IFC0513. Onlineavailable: http://www.ifc.org/wps/wcm/connect/1e6a19804fc58e529881fe0098cb14b9/IFC+Reportpdf?MOD=AJPERES
  41. Scheines, R.; Spirtes, P., Glymour, C., & Meek, C. (1994). TETRAD II: Tools for causal modeling. Users manual. Hillsdale, NJ: Erlbaum.
  42. Shleifer and Vishny (1993). Corruption. The Quarterly Journal of Economics, Vol. 108, No. 3. (Aug., 1993), pp. 599-617.
  43. Shrier, I & Platt, R. W. (2008). Reducing bias through directed acyclic graphs, BMC Medical ResearchMethodology, 8(70) doi:10.1186/1471-2288-8-70
  44. Sleuwaegen, L., &Goedhuys, M., (2002), Growth of firms in developing countries, evidence from Cote dIvoire, Journal of Development Economics, 68 (1), 117-135
  45. Sleuwaegen, Leo and Goedhuys, Micheline, (2002), Growth of firms in developing countries, evidence from Cote dIvoire, Journal of Development Economics, 68, issue 1, p. 117-135
  46. WBES (2010). Enterprise Surveys: COTE DIVOIRE Country Profile 2009, IFC, The World Bank Group
  47. Wheeler, G., and Scheines, R. (2010). Causation, Association, and Confirmation in Explanation,Prediction, and Confirmation: New Trends and Old Ones Reconsidered, edited by Stephan Hartmann, Marcel Weber, Wenceslao, J. Gonzalez, Dennis Dieks, Thomas Uebe, Springer.

[Kouadio Kouassi Hugues (2020); CONSTRAINTS OF SMES IN WEST AFRICA: THE CASE OF COTE DIVOIRE AFTER THE CRISIS Int. J. of Adv. Res. 8 (Mar). 780-796] (ISSN 2320-5407). www.journalijar.com

KOUADIO Hugues
ENSEA

DOI:

Article DOI: 10.21474/IJAR01/10692      
DOI URL: https://dx.doi.org/10.21474/IJAR01/10692

Download Full Paper

Download PDF No. of Downloads: 18 | No. of Views: 47