The effect of entrepreneurial and complementary factors on employment: evidence from Uganda's manufacturing firms

Abstract

The study aimed at looking at the effect of entrepreneurial and complementary factors on number of employees in Uganda’s manufacturing firms. The database was extracted from Uganda’s Manufacturing Firms’ survey carried out by the “World Bank’s Regional Program on Enterprise Development” (RPED, 2006), that was conducted on 345 distinct manufacturing firms. The study was based on exploration analysis and negative binomial estimations. The choice of the model was based on the fact that it is used to model count data in situations when the variance in the response variable is obviously greater than the mean. Results from analysis of data confirm that years in experience of firm owner, education level of the firm owner, years of firm in existence and firm acquisition status had positive influence on number of people employed by firms. Region of origin of Ugandan firm owner, export status of firm, source of capital, investment in technology, keeping financial accounts and the firm being part of an industrial group negatively influenced the number of people employed by manufacturing firms. The study recommends the following; firms ought to access credit, supporting existing firms, business education and graduates’ involvement in manufacturing firms. Promotion of exports and investment in technology are also of paramount importance. Such policy measures if well supported will pave way for employment in large, medium or growing small companies.