Spatial proximity and firm performance: evidence from non-farm rural enterprises in Ethiopia and Nigeria

Abstract

Spatial proximity and firm performance: evidence from non-farm rural enterprises in Ethiopia and Nigeria. Regional Studies. The productivity of non-farm enterprises in rural Africa can be associated with the productivity of other spatially proximate non-farm enterprises. To test for the presence and significance of such spatial autocorrelation, the article uses data from the georeferenced 2011 Ethiopian Rural Socioeconomic Survey (ERSS) and the 2010/2011 Nigeria General Household Survey (NGHS), and employs exploratory spatial data analyses. There is evidence of significant spatial clustering of firm performance in both countries. This spatial dependence is empirically modelled using average distance measures between firms. It is found that in addition to other household, firm and community characteristics, spatial proximity between firms plays an important role in explaining firm productivity in Nigeria and Ethiopia. © 2016 Regional Studies Association.