Value Chain Upgrading in the Informal Agricultural Economy of Uganda: Networks among Small Business Owners as a Solution to Institutional Voids
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Date
2017
Journal Title
Journal ISSN
Volume Title
Publisher
AGRI-QUEST
Abstract
The purpose of this paper is to analyze
how networks between small business
owners (SBOs) in the informal economy of
agriculture in the East African country
Uganda can be a tool to overcome the
barriers caused by institutional voids, in
order to upgrade agricultural value chains.
The analysis suggests that weak or absent
institutions in the agricultural sector lead to
various impediments that especially affect
SBOs operating in the informal sector of
agriculture. Yet, SBOs seem to have found
a way to overcome those hurdles through
establishing business networks to access
capital, resources and markets. Moreover,
those networks are based on informal,
internal mechanisms like bylaws or
internal guidelines that have positive
impact on SBOs’ work. Subsequently, with
the help of networks better quality and
larger quantities can be produced, leading
to an upgrade of the respective value
chain. These findings demonstrate a
valuable and feasible solution for SBOs
operating in the informal sector of
agriculture in developing countries to
upgrade their value chain despite a weak
institutional environment. In addition to
that, the study illustrates that networks are
an informal type of institution, not an
organizational form that substitutes
institutions, hence meaning that the very
existence of networks is not sufficient to
guarantee long-term success for SBOs.
The paper opens paths for future research
to focus on the use of networks as
supplementary informal institutions as a
solution to other barriers SBOs are facing
in developing countries’ informal
agricultural sectors.
Description
Keywords
Networks, Value Chain Upgrading, Institutional Voids, Developing
Citation
Stahn, S., Wickert, C., Katamba, D., Tindiwensi, C., & Seruma, A. AGRI-QUEST. https://knowledge4food.net/wp-content/uploads/2017/08/agri-quest_Research-Paper_No9_2017_Stahn-et-al.pdf