Barriers to development of entrepreneurial ecosystems and economic performance in Southern Africa

Madzikanda, Beverlley; Li, Cai; Dabuo, Francis Tang

doi:10.1080/20421338.2021.1918316

Cited by 6 publications

(4 citation statements)

References 56 publications

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“…In this regard, some scholars have shed light on the impact of Africa's weak BE and institutional setting (voids) 4 on entrepreneurship. Madzikanda et al (2022) recently contended that unhealthy entrepreneurial ecosystems hindered economic output and entrepreneurship in southern African countries. Sheriff and Muffatto (2015) noted that African countries' weak entrepreneurship environments (ecosystems) seem to be responsible for poor entrepreneurship in Africa.…”

Section: The Unique African Business Environment and Institutional Co...mentioning

confidence: 99%

“…In this regard, some scholars have explored how Africa's unique business and institutional setting impact entrepreneurship. For instance, Madzikanda et al (2022) recently noted that weak entrepreneurial ecosystems diminished economic output and entrepreneurship in southern African countries, whereas Abubakar (2015) argued that the poor investment climate in Africa hindered entrepreneurship development. Similarly, Sheriff and Muffatto (2015) claimed that weak entrepreneurial ecosystems are responsible for poor entrepreneurship in Africa, and Munemo (2018) found that foreign direct investment (FDI) was less effective at enhancing entrepreneurship in African countries with less developed financial institutions and markets.…”

Section: Introductionmentioning

confidence: 99%

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The impact of trade facilitation on African SMEs’ performance

2023

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Whilst contemporary literature indicates that the business environment (BE) impacts almost all entrepreneurial activities, there are indications that the unique business and institutional setting in Africa (with its challenges and opportunities) and the nature of SMEs (their strengths and weaknesses), among other factors, lead to the context-specific impact of regulations on the performance of African SMEs. Using regressions and propensity score matching methods on a panel of 39,461 firm observations (27 African countries) from the World Bank Enterprise Surveys, we unearthed evidence to suggest that whilst enabling tax administration and business licensing regulations improve SMEs’ performance, trade facilitation impedes African SMEs’ performance. Furthermore, the institutional context of competition (from foreign firms) worsens trade facilitation’s negative impact on African SMEs’ performance. These findings suggest a fine-tuning of BE regulations in African countries. Trade facilitation, for example, must be carefully thought through and implemented in a way to benefit SMEs.

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Section: The Unique African Business Environment and Institutional Co...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The impact of trade facilitation on African SMEs’ performance

2023

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“…Beyond crime equally significant is the pervasive impact of corruption in the business environment of tourism small businesses in the Eastern Cape. Corruption has been identified as among the most critical barriers to the development of entrepreneurial ecosystems in South Africa (Madzikanda, Li & Dabuo, 2022). Several aspects of corruption conducted by individuals in positions of power were identified as negatively affecting the growth of the businesses of tourism entrepreneurs.…”

Section: Crime and Corruptionmentioning

confidence: 99%

‘Transformation’ and Tourism Small Firm Development in South Africa: Evidence from Eastern Cape Province

Sixaba¹,

Rogerson²

2023

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Since democratic change South Africa has pursued a series of programmes which are targeted at empowering groups and individuals who had been disadvantaged under apartheid. In the tourism sector government initiatives for ‘transformation’ include a commitment to promote new entrepreneurship opportunities for Black-owned small medium or micro-enterprises. This article examines the challenges facing transformation through a study of the constraints operating on Black-owned tourism enterprises in South Africa’s Eastern Cape province. The research is situated within the international literature on small firms in tourism and specifically the challenges of small tourism business development in the Global South. The analysis draws from a survey of 79 Black-owned accommodation establishments as well as semi-structured interviews with tourism entrepreneurs. The results reveal a range of constraints. In this resource-constrained environment several challenges around transformation relate to finance, human resources and knowledge which have been identified as limiting tourism small firm development both in the Global North and South. Other constraints speak to the specificities of the South African experience. Tourism entrepreneurs must confront certain historical legacies of the apartheid past as well as corruption practices which are widespread in the local tourism economy and must be acknowledged as obstacles for the advancement of transformation.

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“…Financial limitations happen when a business has trouble obtaining outside capital. Financial burdens are challenging to pinpoint in a business's statement of financial position, according to [15]. Hatfield's ambitious entrepreneurs must contend with financial limitations when launching their firms.…”

Section: Financial Constraints On Entrepreneursmentioning

confidence: 99%

An investigation into the financial challenges affecting the success of entrepreneurs in South Africa

Nkwinika,

Olufemi Akinrinde

2023

TAPR

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The object of this study is the financial difficulties that impacted the success of business owners in Hatfield, Gauteng province, South Africa. Compared to a global failure rate of 50 %, five out of every seven entrepreneurs in Hatfield, South Africa fail during the first year of operation. This study aimed at looking into the relationship between entrepreneur failure and financial literacy. The methodology employed in this study is interpretive philosophy-based qualitative research. An ethnographic research technique was also used to analyze the current economic condition of business owners in Hatfield. The population was sampled using non-probability purposive sampling techniques. Semi-structured interviews were used to gather the study's leading source of data. The primary research results are thematically examined while also considering the secondary sources. Eliminating financial and liquidity constraints was listed as a goal of financial literacy. Findings garnered revealed that financial, liquidity and credit restrictions are the primary causes of business failures in Hatfield. The lack of financial resources for new businesses in Hatfield, as revealed, prompted several liquidity issues in Hatfield, and further lowers the growth rate of Hatfield businesses. It was discovered that Hatfield's entrepreneurs usually experienced premature failure due to inadequate financial education and training. Impliedly, Hatfield business owners possessed poor cash management, defaulting on loan payments due to lack of financial education. Conversely, only few entrepreneurs and business owners in Hatfield, South Africa possess financial literacy competence with the necessary skills needed to better analyze their financial statements appropriately and increase profitability of their business. The practical implication of this finding is that, most entrepreneurs have high possibility to experience premature business liquidity when they have low or no financial literacy.

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Barriers to development of entrepreneurial ecosystems and economic performance in Southern Africa

Cited by 6 publications

References 56 publications

The impact of trade facilitation on African SMEs’ performance

The impact of trade facilitation on African SMEs’ performance

‘Transformation’ and Tourism Small Firm Development in South Africa: Evidence from Eastern Cape Province

An investigation into the financial challenges affecting the success of entrepreneurs in South Africa

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