Impacts of a Micro-Enterprise Clustering Programme on Firm Performance in Ghana

Widely considered an important backbone of economies in developing countries, micro- and small enterprises face several growth constraints. The creation of industrial zones (IZs) with improved access to infrastructure and secure land tenure is a potential remedy to promote local economic development. We assess the effects of an intervention on business performance indicators that establishes IZs for micro-enterprises in Ghana based on firm-level data on 227 enterprises. The results show that the establishment of IZs leads to the creation of new firms, but for existing firms that relocated to the IZs the effects on firm performance are negative.