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Structure and determinants of production in Textile-Clothing-Leather-Skins (TCLS) craft industry in Benin: a study based on investigations of the value creation in TCLS sector

Structure et déterminants de la production dans l'artisanat de textile, habillement, cuir et peaux : une étude basée sur la création de valeur dans le secteur de textile, habillement, cuir et peaux

Abstract : Sustainable economic growth in Benin requires a better understand of the informal sector, which contributes to two-thirds of GDP. Particularly, craft industry and TCLS subsector is one of informal activity sector to be handled. The objectives of this work were to identify the structure and factors that determine the production in TCLS craft industry. This study was based on a survey carried out in February 2011 on value creation data in craft industry of TCLS in Benin. Lack of data induced by informal activities was circumvented using an imputation method. A Multiple Correspondence Analysis and a classification approach were used to identify the structure the TLCS subsector. A log-linear model taking endogeneity on taxes into account was implemented to determine production underlying factors.This study showed that TCLS sector is structured into small, medium and large firms. The net investment, age of production units, labour and the book-keeping increase the production. The labour (here many apprentices) is not remunerated whereas it constitutes a large asset for the sector. Conclusions and policy implications: Different results suggest initiating training towards companies to explain the importance to keep accounts. Also, policy-makers have to review grids taxes by trade groups following the structure described above.