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The Viability Of Informal Microenterprise In South Africa


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


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


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


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


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.

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Bibliographic Info

Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Journal of Developmental Entrepreneurship.

Volume (Year): 16 (2011)
Issue (Month): 01 ()
Pages: 65-86

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Handle: RePEc:wsi:jdexxx:v:16:y:2011:i:01:p:65-86

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Keywords: Informal sector; entrepreneurship; regional development; Africa;


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Cited by:
  1. Ramani, Shyama V. & Thutupalli, Ajay & Medovarski, Tamas & Chattopadhyay, Sutapa & Ravichandran, Veena, 2013. "Women entrepreneurs in the informal economy: Is formalization the only solution for business sustainability?," MERIT Working Papers 018, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).


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