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The Growth Barriers of Informal Sector Enterprises: Evidence from I ndia
Author(s) -
Sasidharan Subash,
Rajesh Raj S. N.
Publication year - 2014
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/deve.12057
Subject(s) - business , economic shortage , obstacle , job creation , industrial organization , empirical evidence , capital (architecture) , bargaining power , labour economics , manufacturing sector , commerce , economics , microeconomics , linguistics , philosophy , archaeology , epistemology , government (linguistics) , political science , law , history
The present study investigates the growth barriers of informal sector enterprises in I ndia. The empirical analysis is based on the N ational S ample S urvey O rganization's unit‐level data for three years, 2000–2001, 2005–6, and 2010–11. The results of the study reveal: proprietary and large firms survive and grow; enterprises managed by women are less likely to decline; inadequate power supply poses a severe growth obstacle to all categories of firms; and proprietary firms encounter capital shortage while large firms are constrained by the non‐availability of raw materials. We do not find evidence of sub‐contracting acting as an enabling factor in firm growth.