Indigenois Ethnicity and Entrepreneurial Success in Africa

Released on by Taye Mengistae
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  • Indigenois Ethnicity and Entrepreneurial Success in Africa Book Detail

  • Author : Taye Mengistae
  • Release Date : 1999
  • Publisher : World Bank Publications
  • Genre :
  • Pages : 32
  • ISBN 13 :
  • File Size : 59,59 MB
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Indigenois Ethnicity and Entrepreneurial Success in Africa by Taye Mengistae PDF Summary

Book Description: January 2001 Manufacturing businesses owned by an indigenous ethnic group, the Gurage, typically perform better than those of members of any other (major or minority) groups in Ethiopia. Gurage-owned businesses are normally larger and grow faster. Yet Gurage business owners typically are less educated than their counterparts in other groups and have less formal vocational training. Researchers have recently been asking why Asian and European minorities in Africa seem to be more successful in business than are people of indigenous ethnicity. Mengistae draws attention to the significant disparity in business ownership and performance that seems to exist among African ethnic groups as well. After analyzing a random selection of small to medium-size manufacturers in Ethiopia, he finds that establishments owned by an indigenous minority ethnic group, the Gurage, typically perform better than those owned by other (major or minority) groups. Other things being equal, Gurage-owned businesses are normally larger, partly because they are bigger as start-ups and partly because they grow faster. And yet Gurage business owners are the least educated ethnic group in the sample. Because the size and growth rate of a business also increases with the entre-preneur's education, the performance of other businesses would have been even worse if their owners hadn't been better educated than the Gurage. Indeed, dropping education variables from the size determination equation drastically reduces the estimated advantage of Gurage-run businesses. This suggests that the observed effect of ethnicity could be indicative of intergroup differences in unmeasured ability. More important, it means that whether or not the effect will persist in the long run will depend on the trend in interethnic differences in investment in education. This paper--a product of Macroeconomics and Growth, Development Research Group--is part of a larger effort in the group to investigate the microeconomic foundation of the association between ethnic diversity and the poor growth performance that seems to characterize Sub-Saharan Africa. The study was funded by the Bank's Research Support Budget under the research project "The Economics of Ethnicity and Entrepreneurship in Africa." The author may be contacted at [email protected].

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Ethnic Entrepreneurship

Ethnic Entrepreneurship

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Fourth in the series International Research in the Business Disciplines, the papers in this volume provide a survey of the nature and scope of entrepreneurship