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THE EFFECT OF ENTREPRENEURIAL AND COMPLEMENTARY FACTORS ON EMPLOYMENT: EVIDENCE FROM UGANDA’S MANUFACTURING FIRMS

Will Kaberuka


Philip Tumugumye


ABSTRACT

In a rapid socio-economic and demographic change in an increasingly complex world, it is widely recognized that manufacturing firms need more attention than usual in order to provide employment opportunities for an increasing population. Uganda is known to have one of the highest unemployment rates and a declining manufacturing sector despite having one of the Highest Total Entrepreneurial Activity and government continued support. The objective of this study was to establish the effect of entrepreneurial and complementary factors on employment in Uganda’s manufacturing firms. The data used was from 2006 Manufacturing Survey carried out by World Bank’s Regional Program on Enterprise Development in collaboration with Uganda Manufacturers’ Association Consultancy and Information Services. The firms covered by the survey were from the Bureau of Statistics Business Register. Data collected was analyzed using negative binomial regression model. The results showed that some entrepreneurial and complementary factors positively affected the level of employment. The study recommended lowering of interest rate on loans, supporting existing firms by carrying out business education, and supporting elites in starting up manufacturing firms. Promotion of export production and investment in technology are also of paramount importance in Uganda’s quest to increasing employment.


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