Growth, Structure and Firm Dynamics in Grain Markets: The Case of Grain Traders in Ethiopia

Abstract

In this paper we consider the microeconomic evidence on the determinants of firm performance in Ethiopia, with a focus on grain traders. We analyse both internal and external factors, and the relative impacts of these factors on the performance of grain traders. Different economic indicators seem to suggest that grain traders have become increasingly unviable as reflected by absence or stagnation of growth. These firms suffer from a host of internal problems (e.g. weak human resources and other assets) and of external factors such as access to credit, market facilities, policy and regulatory framework, etc.). Hence without renewed focus on promoting firm growth, especially grain traders through improving access to warehouses, relaxing credit constraints, and improving the macroeconomic and regulatory environment, not only grain traders but also rural and urban households will face a very uncertain and untenable future which will hamper the performance of grain markets and the battle against poverty and food insecurity.