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Constraints of SME in West Africa: the case of Côte d'Ivoire after the crisis

KOUADIO, Hugues (2015): Constraints of SME in West Africa: the case of Côte d'Ivoire after the crisis.

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Abstract

Small and medium enterprises are key factors of economic development developing countries. It is crucial to identify the major constraints they face. This paper is interested in the constraints experienced by small and medium enterprises in Côte d’Ivoire from a collection of original data. An ordered probit analysis coupled with a Directed Acyclic Graph (DAG) show that the constraints on sales growth, as perceived by managers, differ according to the characteristics of the company. Also, improved water supply and a user friendly building licensing policy would allow companies to increase their profitability. Furthermore, a deterioration of access to finance entails a significant drop in business sales. Our analysis confirmed the interrelationship between various constraints. Thus, a business climate marked by political instability and insecurity inevitably affects corruption. Also, political stability, reform in tax policy and absence of corruption are likely to improve the financial conditions of companies and promote the growth of business sales. Thus, all the reforms undertaken by the government of Côte d'Ivoire to improve the business climate must take into account the characteristics of companies as well as the interrelationship between the various obstacles they encounter.

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