Journal of Developmental Entrepreneurship

Although post-apartheid South Africa has introduced various policies and institutions to support small and micro businesses, these efforts have not delivered expected results; many such firms are not growing and are failing. Hence, this study investigates the constraints holding back the development of micro ventures and recommends what can be done to assist them. It is based on a sample of microenterprise informal sector operators in the South African province of Mpumalanga. Using Principal Component Analysis (PCA), a set of fourteen external and another of fifteen internal environmental constraints on growth were examined. The results indicate each set explains almost two-thirds of the total variation in growth limitations, with growth as an integrated component of sale, asset, labor and profit. The regression analyses confirmed that internal factors were significantly heavier hurdles in limiting the growth of the microenterprise operators than the external ones. The internal constraints were ‘education and training,’ ‘entrepreneurial factors’ and ‘storage and infrastructure,’ and the external constraints related to market factors. Because the external constraint is mainly exogenous, more efforts have to be placed on addressing internal entrepreneurial limitations for microenterprise to experience growth.

This paper offers a new framework of value co-creation in a small-medium enterprise (SME) community in which multi-actor interaction in the community plays an important role to do collective resource integration to overcome its limitation. The findings demonstrate that collaborative networks, dynamic interaction and resource integration are proven as a valid platform of value co-creation. Collaborative networks with external actors and dynamic interaction among members within a SME community link one another and show positive influence on resource integration in the value co-creation process. A SME can adopt this value co-creation platform as a new strategy for business development and sustainability. This study conveys a different perspective for service-dominant logic concept.

What is the career background of formal and informal entrepreneurs and does this influence their formalization decision? We employ the theory of planned behavior, social identity theory and embedded career capital framework to develop hypotheses on how the new venture formalization decision is dependent on the entrepreneur’s career history. We find that employment in a family business and in the private sector is related positively to founding a formal new venture. Furthermore, our results show that a career in the same industry as the new venture increases the likelihood of formalizing the venture. These findings emphasize the role of the career background in the entrepreneur’s formalization decision through building embedded-career capital, influencing the social identity and determining the attitude toward starting a formal versus informal new venture.

This paper evaluates critically the relationship between starting-up unregistered and firm performance. The widespread belief across all the dominant theories of informal entrepreneurship is that unregistered start-ups experience poorer future firm performance than those registered from the outset of their operations. To evaluate this poorer performance thesis, this paper reports World Bank Enterprise Survey (WBES) data on 377 enterprises in Albania collected in 2019. After controlling for other determinants of firm performance, the finding is that formal enterprises that started-up unregistered have significantly higher annual sales growth than enterprises that registered from the outset. To explain this, the argument is that in weak institutional environments, such as Albania, the advantages of operating unregistered at the outset outweigh the benefits of registration. The result is a call to re-theorize firm performance in the informal sector and for policy to shift toward a more facilitating approach that enhances benefits of registration.

It is widely assumed that informal sector enterprises have a harmful impact on the performance of formal enterprises. This paper aims to provide an evidence-based evaluation of whether this is the case. To do so, it reports World Bank Enterprise Survey (WBES) data collected from 360 formal enterprises in Bosnia and Herzegovina in 2019. The finding is that formal enterprises viewing informal competition as a severe obstacle do not witness significantly lower sales growth, employment growth or productivity growth. Indeed, such enterprises witness significantly higher sales growth than those who do not view informal sector competitors as a severe obstacle. The theoretical and policy implications are discussed.

Veterans may acquire technical skills and leadership ability from their military service but have little information concerning specific entrepreneurial tasks, such as developing a business plan. This descriptive survey study examines avenues for veterans to find assistance to acquire needed skills, adding to their entrepreneurial self-efficacy. We surveyed 68 U.S. veterans who were emerging entrepreneurs, either owning their own business or indicating they intended to start their own company. Veterans’ personal attitudes and beliefs, including entrepreneurial self-efficacy, risk propensity and tolerance of ambiguity, may increase their entrepreneurial intentions. A model of veterans as emerging entrepreneurs and five propositions are offered.

This research presents empirical results about the importance of tax morale in the probability of tax compliance in social businesses. It highlights the relevance of increasing the intrinsic value to the social business owner on paying taxes, instead of the traditional approach of increasing punishment, to reduce non-compliance. The paper suggests changing the focus question from “Why don’t they pay taxes?” to “Why, despite the low probability of being punished for not paying taxes, do some social business owners comply with their tax contribution?”. The main results of the research point out that factors such as public expenditure in economic development increases the probability of tax compliance in social businesses, whereas public expenditure in social programs decreases this probability.