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Business by Generator The impact of fragility and hybridity on Lebanese entrepreneurship – A Case-Study of the Electricity Sector

Nora Stel

No 2012/52, Working Papers from Maastricht School of Management

Abstract: Governance is often treated as a ‘black box’ explanation for unproductive or destructive entrepreneurship. In order to improve our understanding of how governance structures influence entrepreneurship and innovation it is instructive to consider how entrepreneurs function under so-called fragile or hybrid governance. In this exploratory paper I provide an overview of the governance-entrepreneurship nexus in Lebanon. I argue that although Lebanese entrepreneurial attitudes appear to be very positive, entrepreneurial activities seem to be adversely impacted by governance challenges and entrepreneurial aspiration is underdeveloped. In-depth interviews with Lebanese experts show that Lebanese entrepreneurs face significant obstacles, often related to the political context and system. The paper highlights the issue of high utility – specifically electricity – costs as a case-study of how hybrid political governance affects entrepreneurship. I show how fragility and hybridity – through violent conflict and sectarian oligopolies – generate a protracted situation of high electricity costs that undermine competitiveness and innovation. I argue that this is insufficiently recognized in the overly technical literature on the Lebanese electricity sector specifically and Lebanese entrepreneurship generally.

Date: 2012-11
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