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TRANSITION PROBABILITIES BETWEEN ENTREPRENEURSHIP PHASES IN AFRICA’S EMERGING ECONOMIES: THE CASE OF NIGERIA AND SOUTH AFRICA

Folashade Akinyemi and Kalu Ojah ()
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Folashade Akinyemi: Institute for Entrepreneurship and Development Studies, Obafemi Awolowo University, Ile-Ife, Nigeria

Journal of Developmental Entrepreneurship (JDE), 2018, vol. 23, issue 03, 1-20

Abstract: Using cross-sectional data from 1148 structured questionnaires, administered in two key commercial hubs of Africa’s largest economies (609 from Lagos in Nigeria and 539 from Johannesburg in South Africa), we examine the volatility of venture firms, and particularly ascertain what life-cycle phases they are likely to transition out of quickly or sluggishly in the entrepreneurship process. Adopting GEM’s concept of entrepreneurship phases — conception, firm’s-birth, persistence, established and renowned phases — we find that the most volatile entrepreneurship phase in Nigeria is the conception phase while the conception and firm’s-birth phases are the most volatile in South Africa. The highest transition rate for start-ups in both countries occurs between the persistent and established phases. Overall, Nigeria’s start-ups have better prospects for progression than South Africa’s, and the transitioning differences between the two countries are attributable to differences in personality traits of the entrepreneurs. Therefore, governments seeking to influence likelihood of success at the more strategic phases of the entrepreneurship process should prioritize early phases while only channeling little of the scarce support funds to later-phases, especially when seeking to scale-up productive capabilities of emerging enterprises, in addition to encouraging personality traits that can compensate for inadequate environmental support for entrepreneurship.

Keywords: Nigeria; South Africa; Africa; emerging economies; entrepreneurship phases; start-ups; transition probabilities; SME support funds; success rate (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S1084946718500164

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