Skip to main navigation menu Skip to main content Skip to site footer

Entrepreneurial ecosystem and start-ups in Sub-Saharan Africa: Empirical evidence based on Global Entrepreneurship Monitor database

DOI:

https://doi.org/10.15678/IER.2022.0801.02

Abstract

Objective: The aim of the study is to examine the nexus between entrepreneurial ecosystem and nascent entrepreneurship in sub-Saharan Africa.

Research Design & Methods: The study employed a quantitative methodology and consequently, the variables and data were drawn from the Global Entrepreneurship Monitor (GEM) survey ranging from 2004-2019. The sample observations of the study were eight countries across sub-Saharan Africa. The country-level data were analyzed through the application of least square regression to determine the nexus between the financing environment, government support policy, physical and service infrastructure and entrepreneurial start-ups.

Findings: The study findings demonstrate that entrepreneurial financing had positive effect on nascent entrepreneurship; government support policy had positive effect on entrepreneurial start-ups; infrastructure had positive effect on early entrepreneurial activity.

Implications & Recommendations: The paper recommends that there should be a renewed commitment on the part of governments to support and initiate intervention programmes to build entrepreneurial ecosystem and promote entrepreneurial activity but such programme design and implementation should look into contextual specifics and consider the COVID-19 related factors.

Contribution & Value Added: In this paper, we have offered significant contribution to the existing body of scholarship in small business management and entrepreneurship from the prisms of global health emergency and that building a friendly entrepreneurial ecosystem stimulates prevalence and sustainability of nascent entrepreneurship in countries.

Keywords

entrepreneurial ecosystem, early entrepreneurial activity, start-ups, economic recession and Africa

(PDF) Save

Author Biography

Timinepere Ogele Court

PhD in Management, he is a Senior lecturer in the Department of Business Administration, University of Africa, Toru-Orua, Bayelsa State, Nigeria. He has research interest in Organisational Behaviour, Human Resource Management and Entrepreneurship.

Obaima Ateibueri Arikekpar

Principal lecturer in the Department of Business Education, Isaac Jasper Boro College of Education, Sagbama, Bayelsa State, Nigeria. She is a PhD student/scholar with the Niger Delta University, Wilberforce HighLand, Bayelsa State and researches in corporate finance and entrepreneurship.


References

  1. Acs, Z. J., Stam, E., Audretsch, D. B., & O’Connor, A. (2017). The linkages of the entrepreneurial ecosystem approach. Small Business Economics, 49(1), 1-10 https://doi.org/10.1007/s11187-017-9864-8
  2. Adusei, M. (2016). Does entrepreneurship promote economic growth in Africa? African Development Review, 28(2), 201-214. https://doi.org/10.1111/1467-8268.12190
  3. Agboli, M., &Ukaegbu, C. C. (2006). Business environment and entrepreneurial activity in Nigeria: implications for industrial development. Journal of Modern African Studies, 44(1), 1-30. https://doi.org/10.1017/S0022278X05001394
  4. Alon, I., Lerner, M., &Shoham, A. (2016). Cross-national cultural values and nascent entrepreneurship: Factual versus normative values. International Journal of Cross Cultural Management, 16(3), 321-340. https://doi.org/10.1177/1470595816674744
  5. Ataguba, J. E. (2020). COVID-19 pandemic, a war to be won: understanding its economic implications for Africa. Applied Health Economics and Health Policy, 18, 325-328 https://doi.org/10.1007/s40258-020-00580-x
  6. Baumol, W. J., & Strom, R. J. (2007). Entrepreneurship and economic growth. Strategic Entrepreneurship Journal, 1(3‐4), 233-237. https://doi.org/10.1002/sej.26
  7. Bliemel, M., Flores, R., De Klerk, S., & Miles, M. P. (2019). Accelerators as start-up infrastructure for entrepreneurial clusters. Entrepreneurship & Regional Development, 31(1-2), 133-149. https://doi.org/10.1080/08985626.2018.1537152
  8. Block, J. H., Colombo, M. G., Cumming, D. J., & Vismara, S. (2018). New players in entrepreneurial finance and why they are there. Small Business Economics, 50(2), 239-250. https://doi.org/10.1007/s11187-016-9826-6
  9. Brown, R., Rocha, A., & Cowling, M. (2020). Financing entrepreneurship in times of crisis: Exploring the impact of COVID-19 on the market for entrepreneurial finance in the United Kingdom. International Small Business Journal, 38(5), 380-390. https://doi.org/10.1177/0266242620937464
  10. Buffart, M., Croidieu, G., Kim, P. H., & Bowman, R. (2020). Even winners need to learn: How government entrepreneurship programs can support innovative ventures. Research Policy, 49(10), 1-19 https://doi.org/10.1016/j.respol.2020.104052
  11. World Bank (2017). Innovation and entrepreneurship ecosystem diagnostic, The World Bank Working Paper Series No. 120865, pp. 1-60.
  12. Coibion, O., Gorodnichenko, Y., & Weber, M. (2020). The cost of the covid-19 crisis: Lockdowns, macroeconomic expectations, and consumer spending, National Bureau of Economic Research (NBER) Working Paper Series w27141 https://www.nber.org/papers/w27141
  13. Cumming, D. (2007). Government policy towards entrepreneurial finance: Innovation investment funds. Journal of Business Venturing, 22(2), 193-235. https://doi.org/10.1016/j.jbusvent.2005.12.002
  14. Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of business venturing, 18(3), 301-331.https://doi.org/10.1016/S0883-9026(02)00097-6
  15. Denis, D. J. (2004). Entrepreneurial finance: an overview of the issues and evidence. Journal of corporate finance, 10(2), 301-326.https://doi.org/10.1016/S0929-1199(03)00059-2
  16. Edelman, L., & Yli-Renko, H. (2010). The impact of environment and entrepreneurial perceptions on venture-creation efforts: Bridging the discovery and creation views of entrepreneurship. Entrepreneurship Theory and Practice, 34(5), 833-856. https://doi.org/10.1111/j.1540-6520.2010.00395.x
  17. Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. 1,1-26 IESE Business School Working Paper No. WP-1240-E, http://dx.doi.org/10.2139/ssrn.3557504
  18. Hechavarría, D. M., & Ingram, A. E. (2019). Entrepreneurial ecosystem conditions and gendered national-level entrepreneurial activity: a 14-year panel study of GEM. Small Business Economics, 53(2), 431-458. https://doi.org/10.1007/s11187-018-9994-7
  19. Holcombe, R. G. (1998). Entrepreneurship and economic growth. The Quarterly Journal of Austrian Economics, 1(2), 45-62.
  20. Gittell, R., Sohl, J., & Tebaldi, E. (2014). Do Entrepreneurship and High-Tech Concentration Create Jobs? Exploring the Growth in Employment in U.S. Metropolitan Areas From 1991 to 2007.EconomicDevelopmentQuarterly,28(3),244-253. https://doi.org/10.1177/0891242414530467
  21. Iansiti, M., &Levien, R. (2004). Keystones and dominators: Framing operating and technology strategy in a business ecosystem. Harvard Business School, Boston, (03-061), 1-82.
  22. Johnson, P. S., Parker, S. C., &Wijbenga, F. (2006). Nascent entrepreneurship research: achievements and opportunities. Small Business Economics, 27(1), 1-4. https://doi.org/10.1007/s11187-006-9004-3
  23. Ketchen Jr, D. J., & Craighead, C. W. (2020). Research at the intersection of entrepreneurship, supply chain management, and strategic management: opportunities highlighted by COVID-19. Journal of Management, 46(8), 1330-1341. https://doi.org/10.1177%2F0149206320945028
  24. Korpysa, J. (2019). Enterpreneurial orientation of startups: Research results. International Entrepreneurship Review (previously published as International Entrepreneurship | Przedsiębiorczość Międzynarodowa), 5(2), 37-51. https://doi.org/10.15678/IER.2019.0502.03
  25. Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A., ... & Berger, E. S. (2020). Startups in times of crisis-A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, 1-13 https://doi.org/10.1016/j.jbvi.2020.e00169Ge
  26. Kumar, R., & Raj, T. (2019). Role of Entrepreneurship in Boosting Economic Growth and Employment in India. SEDME (Small Enterprises Development, Management & Extension Journal), 46(4), 273-281. https://doi.org/10.1177/0970846419894750
  27. Laguna, M. (2013). Self‐efficacy, self‐esteem, and entrepreneurship among the unemployed. Journal of Applied Social Psychology, 43(2), 253-262. https://doi.org/10.1111/j.1559- 1816.2012.00994.x
  28. Mack, E., & Mayer, H. (2016). The evolutionary dynamics of entrepreneurial ecosystems. Urban Studies, 53(10), 2118-2133. https://doi.org/10.1177/0042098015586547
  29. Maritz, A., Perenyi, A., de Waal, G., & Buck, C. (2020). Entrepreneurship as the unsung hero during the Current COVID-19 economic crisis: Australian perspectives. Sustainability, 12(11), 1-9 https://doi.org/10.3390/su12114612
  30. McMullen, J. S. (2011). Delineating the Domain of Development Entrepreneurship: A Market-Based Approach to Facilitating Inclusive Economic Growth. Entrepreneurship Theory and Practice, 35(1), 185-215. https://doi.org/10.1111/j.1540-6520.2010.00428.x
  31. Moore, J.F., (1993). Predators and prey: a new ecology of competition. Harvard Business Review, 71 (3),75-86.
  32. Naude, W., Gries, T., Wood, E., &Meintjies, A. (2008). Regional determinants of entrepreneurial start-ups in a developing country. Entrepreneurship and regional development, 20(2), 111-124. https://doi.org/10.1080/08985620701631498
  33. Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., & Agha, R. (2020). The socio-economic implications of the coronavirus and COVID-19 pandemic: A review. International Journal of Surgery. 78. 185-193 https://doi.org/10.1016/j.ijsu.2020.04.018
  34. Nicotra, M., Romano, M., Del Giudice, M., & Schillaci, C. E. (2018). The causal relation between entrepreneurial ecosystem and productive entrepreneurship: A measurement framework. The Journal of Technology Transfer, 43(3), 640-673.
  35. Nikiforou, A., Dencker, J. C., & Gruber, M. (2019). Necessity entrepreneurship and industry choice in new firm creation. Strategic Management Journal, 40(13), 2165-2190. https://doi.org/10.1002/smj.3075
  36. Ozili, P. K. (2020). COVID-19 in Africa: socioeconomic impact, policy response and opportunities. Policy Response and Opportunities (April 13, 2020) https://doi.org/10.1108/IJSSP-05-2020-0171
  37. Paulson, A. L., & Townsend, R. (2004). Entrepreneurship and financial constraints in Thailand. Journal of Corporate Finance, 10(2), 229-262. https://doi.org/10.1016/S0929-1199(03)00056-7
  38. Peprah, A. A., & Adekoya, A. F. (2020). Entrepreneurship and economic growth in developing countries: Evidence from Africa. Business Strategy & Development, 3(3), 388-394. https://doi.org/10.1002/bsd2.104
  39. Roper, S., & Scott, J. M. (2009). Perceived financial barriers and the start-up decision: An econometric analysis of gender differences using GEM data. International Small Business Journal, 27(2), 149-171. https://doi.org/10.1177%2F0266242608100488
  40. Sternberg, R. (2014). Success factors of university spin-offs: Regional government support programs versus regional environment. Technovation, 34(3), 137-148.https://doi.org/10.1016/j.technovation.2013.11.003
  41. Stuetzer, M., Obschonka, M., Brixy, U., Sternberg, R., & Cantner, U. (2014). Regional characteristics, opportunity perception and entrepreneurial activities. Small Business Economics, 42(2), 221-244.
  42. Sussan, F., &Acs, Z. J. (2017). The digital entrepreneurial ecosystem. Small Business Economics, 49(1), 55-73 https://doi.org/10.1007/s11187-017-9867-5
  43. Tan, T.-M., Tan, W.-L., & Young, J. E. (2000). Entrepreneurial Infrastructure in Singapore: Developing a model and mapping participation. The Journal of Entrepreneurship, 9(1),1-33. https://doi.org/10.1177/097135570000900101
  44. Valliere, D & Peterson, R. (2009). Entrepreneurship and economic growth: Evidence from emergingand developed countries, Entrepreneurship and Regional Development, 21(5/6), 459-480. https://doi.org/10.1080/08985620802332723
  45. Worldometer (2020). COVID19 coronavirus pandemic. Available at: https://www.worldometers.info/coronavirus/. Accessed August 10 2020
  46. Yusuf, J. E. (2010). Meeting entrepreneurs’ support needs: Are assistance programs effective? Journal of Small Business and Enterprise Development. 17(2),294-307. https://doi.org/10.1108/14626001011041283

Downloads

Download data is not yet available.

Similar Articles

1-10 of 129

You may also start an advanced similarity search for this article.