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The Viability Of Informal Microenterprise In South Africa

Author

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  • DOUGLAS WOODWARD

    (Darla Moore School of Business, University of South Carolina, Columbia, SC 29208, USA)

  • ROBERT ROLFE

    (Darla Moore School of Business, University of South Carolina, Columbia, SC 29208, USA)

  • ANDRÉ LIGTHELM

    (Bureau of Market Research, University of South Africa, PO Box 392 UNISA 0003, South Africa)

  • PAULO GUIMARÃES

    (Darla Moore School of Business, University of South Carolina, Columbia, SC 29208, USA)

Abstract

This paper analyzes entrepreneurs in South Africa's informal sector. The aim is to determine the extent to which African informal retail trade spawns viable enterprises. To assess the prospects for South Africa's informal retail sector, we obtained questionnaires from owners of small-scale establishments in a random sample taken throughout the country in 2007. Owner's income and sales data provided a basis for investigating viability. Regression analysis tests hypotheses identified as crucial to higher income and sales, including startup capital, size, male/female ownership, business training and the proximity to shopping centers. Also tested is the influence of urbanization externalities on sales and owner's income. Initial capital and positive urban externalities have a strong influence on the ability to generate a sustainable livelihood for informal entrepreneurs. After controlling for startup capital, location and other factors, it appears women entrepreneurs face distinct difficulties in generating a viable income through informal retail trade.

Suggested Citation

  • Douglas Woodward & Robert Rolfe & André Ligthelm & Paulo Guimarães, 2011. "The Viability Of Informal Microenterprise In South Africa," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 65-86.
    • Handle: RePEc:wsi:jdexxx:v:16:y:2011:i:01:n:s1084946711001719
    DOI: 10.1142/S1084946711001719
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    References listed on IDEAS

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    1. Coetzee, Gerhard K., 1998. "Retail Rural Finance In South Africa: From Policies To Practice," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 37(4), pages 1-13, December.
    2. Katy Cornwell & Brett Inder, 2004. "Migration and Unemployment in South Africa: When Motivation Surpasses the Theory," Monash Econometrics and Business Statistics Working Papers 2/04, Monash University, Department of Econometrics and Business Statistics.
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    Cited by:

    1. Folashade Akinyemi & Kalu Ojah, 2018. "Transition Probabilities Between Entrepreneurship Phases In Africa’S Emerging Economies: The Case Of Nigeria And South Africa," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-20, September.
    2. Ojong, Nathanael & Simba, Amon & Dana, Leo-Paul, 2021. "Female entrepreneurship in Africa: A review, trends, and future research directions," Journal of Business Research, Elsevier, vol. 132(C), pages 233-248.
    3. Surender Mor & Sonu Madan & Geoffrey R. Archer & Arvind Ashta, 2020. "Survival of the Smallest: A Study of Microenterprises in Haryana, India," Millennial Asia, , vol. 11(1), pages 54-78, April.

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