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Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

Bibliographic Data

ID9727125
AuthorsPhilippe Alby (Toulouse School of Economics), Emmanuelle Auriol (0000-0003-2261-8736, Toulouse School of Economics), Pierre Nguimkeu (0000-0002-6744-4867, Georgia State University)
Year2020
Volume87
Issue346
Pages299-327
Publication date2020-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ecca.12330
OpenAlexW2897977896
LanguageEN
Citations received3
References cited36

In the absence of a public safety net, wealthy Africans have the social obligation to share their resources with their needy relatives in the form of cash transfers and inefficient family hiring. We develop a model of entrepreneurial choice that accounts for this social redistributive constraint. We derive predictions regarding employment choices, productivity, and profitability of firms run by entrepreneurs of African versus non‐African origin. Everything else equal, local firms are overstaffed and less productive than firms owned by non‐locals, which discourages local entrepreneurship. Using data from the manufacturing sector, we illustrate the theory by structurally estimating the proportion of missing African entrepreneurs. Our estimates, which are suggestive due to the data limitation, vary between 8% and 12.6% of the formal sector workforce. Implications for the role of social protection are discussed

Business · Constraint (computer-aided design) · Economic growth · Economics · Entrepreneurship · Labour economics · Productivity · Profitability index · Workforce · Economic Growth and Development · Finance · Innovation and Socioeconomic Development · Microfinance and Financial Inclusion

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Unique citing works3
Citations per year0,5
Citation span2020 - 2023 (4)
Citation velocityhistorical
Highly citedNo
Citation typesNeutral: 3

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