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How do African SMEs respond to climate risks? Evidence from Kenya and Senegal

Crick, Florence and Eskander, Shaikh M.S.U. and Fankhauser, Samuel and Diop, Mamadou (2018) How do African SMEs respond to climate risks? Evidence from Kenya and Senegal. World Development, 108. pp. 157-168. ISSN 0305-750X

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Identification Number: 10.1016/j.worlddev.2018.03.015

Abstract

This paper investigates to what extent and how micro, small and medium-sized enterprises (SMEs) in developing countries are adapting to climate risks. We use a questionnaire survey to collect data from 325 SMEs in the semi-arid regions of Kenya and Senegal and analyze this information to estimate the quality of current adaptation measures, distinguishing between sustainable and unsustainable adaptation. We then study the link between these current adaptation practices and adaptation planning for future climate change. We find that financial barriers are a key reason why firms resort to unsustainable adaptation, while general business support, access to information technology and adaptation assistance encourages sustainable adaptation responses. Engaging in adaptation today also increases the likelihood that a firm is preparing for future climate change. The finding lends support to the strategy of many development agencies who use adaptation to current climate variability as a way of building resilience to future climate change. There is a clear role for public policy in facilitating good adaptation. The ability of firms to respond to climate risks depends in no small measure on factors such as business environment that can be shaped through policy intervention. Highlights: - Adaptive capacity determines the quality of current adaptation measures of SMEs. - Supportive business environment encourages sustainable adaptation responses. - Financial barriers lead SMEs to unsustainable adaptation practices. - Current adaptation practices influence the planning for future climate change. - Policy interventions can influence SMEs’ ability to respond to climatic risks.

Item Type: Article
Official URL: https://www.journals.elsevier.com/world-developmen...
Additional Information: © 2018 Elsevier B.V.
Divisions: Grantham Research Institute
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Date Deposited: 16 Apr 2018 14:19
Last Modified: 12 Jul 2018 11:08
Projects: ES/K006576/1
Funders: Economic and Social Research Council, Department for International Development, International Development Research Centre, Grantham Foundation for the Protection of the Environment
URI: http://eprints.lse.ac.uk/id/eprint/87482

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