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Collective Action Opportunities for Upgrading the Value Chain of Small-Scale Wooden Furniture Enterprise in Hawassa, Ethiopia

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Collective Action Opportunities for Upgrading the Value Chain of Small-Scale Wooden Furniture Enterprise in Hawassa, Ethiopia Collective Action Opportunities for Upgrading the Value Chain of Small-scale Wooden Furniture Enterprise in Hawassa, Ethiopia Master Thesis Presented to gain admission to the Master of Science (MSc.) degree at Rhine-Waal University of Applies Sciences, Kleve By Alexander David Koch Matriculation No. 24192 MSc. Biological Resource Faculty Life Sciences Submission deadline: 21.04.2020 Supervisor: Prof. Dr. Dietrich Darr Co-supervisor: Dr. Maxi Domke Declaration I hereby declare that this seminar paper, entitled ‘Collective Action Opportunities for Upgrading the Value Chain of Small-scale Wooden Furniture Enterprise in Hawassa, Ethiopia’, is all my own work. I have only used the sources or resources I have explicitly referenced. I have attributed all direct and indirect quotations. Berlin, 16.04.2020 I Acknowledgment I am extremely grateful to have had the opportunity to conduct research for my master thesis in Ethiopia. Such an experience is challenging in many ways but has ultimately inspired a deep interest and aspiration to continue in such a field in the future. I would like to express a profound sense of gratitude to Prof. Dr. Dietrich Darr, who made this research project possible and supported me throughout its entirety. The guidance throughout my research always strengthened my confidence and illuminated my ambition. I would also like to thank Dr. Maxi Domke for helping me stay on the right path, providing valuable feedback and coordinating my integration into the WoodCluster project. My gratitude extends to all partners of the WoodCluster project and the entire team at the Institute for International Forestry and Forest Products in Tharandt. I thereby especially thank Prof. Dr. Jürgen Pretzsch, for his interest in my work and valuable suggestions, and Prof. Dr. Tsegaye Bekele, for the practical guidance during my fieldwork activities. I am also grateful for all those that supported me during my stay in Hawassa. Thank you to Dr. Menfese Tadesse and Prof. Dr. Dong-Gill Kim for giving me helpful insights and contacts. Thank you to Tafesse for supporting the access to valuable interview partners. Thanks to my interpreter Desta Fichala, who was sleepy at times, but essentially laid a huge foundation for this study and has become a close friend. Thank you also to all that made the stay in Hawassa very enjoyable, including Bibi, Chou and Kiff, for the great hospitality at Zebra Guesthouse as well as Remke and Kukusha, for the reliable supply of Dashen. I also extend my sincerest thanks to all my interview partners for showing an interest in my research and helping me improve and widen my academic scope. Thank you to Kassahun, Ermi, Wondiye and Tewodros for giving me substantial and encouraging insights into the local furniture sector. Conducting such challenging research for a master thesis cannot be successful without the love and support from friends and family. Thank you Katharina, Adinda, Victor, Melanie and Ruth for all the joyful moments and prevailing optimism. I am also very grateful to have spent my stay in Ethiopia with Kendisha, who helped me tremendously and with whom I shared many unforgettable moments. Thank you Mom, Dad, Niklas and Sophia, for always encouraging and guiding me through all stages of my life. II Table of Content List of figures ................................................................................................................................ VI List of tables ................................................................................................................................ VII List of acronyms ......................................................................................................................... VIII Abstract .......................................................................................................................................... X 1 Introduction .......................................................................................................................... 1 1.1 Research objectives ...................................................................................................... 3 1.2 Organization of the thesis ............................................................................................. 4 2 Background and literature review......................................................................................... 4 2.1 Forest-based value chains in Ethiopia........................................................................... 4 2.2 Micro and small wood-based furniture enterprises in Ethiopia ................................... 7 2.3 Enterprise development policies in Ethiopia ................................................................ 9 3 Theoretical framework ........................................................................................................ 12 3.1 Value chain analysis .................................................................................................... 12 3.1.1 The value chain structure.................................................................................... 12 3.1.2 Value chain analysis in developing countries ..................................................... 13 3.1.3 Value added ........................................................................................................ 14 3.1.4 Value chain governance structure ...................................................................... 14 3.1.5 Value chain access structure ............................................................................... 15 3.1.6 Challenges of value chain actors ......................................................................... 16 3.2 Value chain upgrading ................................................................................................ 16 3.2.1 Process, product and functional upgrading ........................................................ 16 3.2.2 Improving value chain coordination ................................................................... 16 3.3 Upgrading with collective action ................................................................................ 17 3.3.1 Collective actions for enterprise development in emerging economies ............ 18 3.3.2 Informal collective actions through networking ................................................. 20 3.3.3 Collective action for enterprise development: Cases for business associations 21 3.4 Features of functional business associations for enterprise development ................ 23 3.4.1 Internal associational capacities ......................................................................... 23 3.4.2 Encouraging external factors .............................................................................. 25 4 Conceptual framework ........................................................................................................ 26 5 Method ................................................................................................................................ 28 5.1 Study site ..................................................................................................................... 28 5.2 Research design .......................................................................................................... 30 5.3 Sampling technique .................................................................................................... 36 5.4 Data collection ............................................................................................................ 37 5.4.1 Primary data collection ....................................................................................... 37 III 5.4.2 Secondary data collection ................................................................................... 38 5.5 Reliability of data ........................................................................................................ 39 5.6 Data analysis ............................................................................................................... 40 5.6.1 Qualitative content analysis ................................................................................ 40 5.6.2 Statistical evaluation ........................................................................................... 40 5.6.3 Geographical distribution ................................................................................... 40 5.6.4 Value chain mapping ........................................................................................... 41 5.6.5 Horizontal and vertical network structure and characteristics .......................... 41 5.6.6 Quantifying the value chain ................................................................................ 42 5.6.7 Economic analysis of the value chain ................................................................. 42 5.6.8 Challenges and upgrading options ...................................................................... 43 5.6.9 Choosing, describing and evaluating a ‘best bet’ upgrading strategy ................ 43 6 Results ................................................................................................................................. 44 6.1 Geographical distribution ........................................................................................... 44 6.2 Legal framework and external support services ......................................................... 45 6.3 Value chain map .........................................................................................................
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