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Contemporary Microenterprise

Contemporary Microenterprise

Concepts and Cases

Edited by Joseph Mark S. Munoz

While there have been numerous books and articles written on the popular topic of ‘microfinance’, few books have been written on the business model behind it: the ‘microenterprise’. Due to its diversity of thought and high quality of chapter contributions, this book is poised to be the book on ‘microenterprises’. Contemporary Microenterprise is a collage of the latest research and viewpoints on the subject by recognized academics and experts from around the globe.

Chapter 7: The Challenges for Tourism Microenterprises in the Tiger Leaping Gorge, Southwest China

Sacha Rawlence

Subjects: business and management, entrepreneurship, international business, development studies, development economics, economics and finance, development economics


Sacha Rawlence1 INTRODUCTION The microenterprises in this chapter are tourist guesthouses owned and operated by farming families in the Tiger Leaping Gorge, in rural Yunnan Province, Southwest China. The families include a range of ethnic minorities, but all have a common aim of increasing their income and diversifying their livelihoods through their involvement in inbound tourism. This location lends itself to microenterprise, due to its level of economic development being below the national average, its lack of large employers and its dispersed rural population. The enterprises display some characteristics commonly associated with rural microenterprise, including few or no employees outside the immediate family, an aim of generating non-farm income, and undertaking seasonal part-time work alongside farming (Nowak, 1989). However, the business model adopted by many of these guesthouses is unexpected: it is characterized by self-reliance, with in-house production leading to withdrawal and isolation from market relationships, rather than by deep integration into a local trading network that could otherwise support the specialization of activities. The author suspects that this model might not result solely from a deliberate choice by the proprietors, as any future growth of these microenterprises will depend on wider trade and specialization, but that it might in fact have been determined by the challenges posed by the environment. The theories of transaction costs and of institutions will be used to examine this environment, and to suggest which elements might direct the tendency towards isolation. 74 The challenges for tourism microenterprises in Southwest China 75 TRANSACTION COST THEORY...

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