Too Sick To Start: Health of the Entrepreneur and Business Entry in Townships around Durban, South Africa
AbstractSmall businesses contribute a substantial share of economic activity in all countries, and may be an engine for job creation in developing economies. Unlike large firms with management teams, small businesses are usually run by one key person, the owner-entrepreneur, who bears almost all of the risks and who makes almost all of the decisions related to the business. Because the owner-entrepreneur also embodies most of the firm-specific knowledge capital, health of the owner-entrepreneur is an important factor contributing to the production process. Following a cohort of respondents with and without small businesses around Durban, South Africa, over a three-year period, our prior study found that poor baseline health and deteriorations in the health of the owner-entrepreneur were strongly associated with subsequent business exit. In the current study, we examined the relationship between an individual’s physical health and the decision to start a business. Our results suggest that respondents who were recent business entrants were in better health than respondents who did not start new businesses. Moreover, respondents without a business at the beginning of the study but who later opened businesses during the three-year study interval were significantly more likely to have better health before business entry than those respondents who never started a new business. Hence, good health among entrepreneurs seems to be an important prerequisite to both small business survival and small business entry.
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Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 0803.
Length: 18 pages
Date of creation: Sep 2008
Date of revision:
South Africa; small businesses; business entry; health; entrepreneur;
Find related papers by JEL classification:
- I12 - Health, Education, and Welfare - - Health - - - Health Production
This paper has been announced in the following NEP Reports:
- NEP-AFR-2008-09-20 (Africa)
- NEP-ALL-2008-09-20 (All new papers)
- NEP-DEV-2008-09-20 (Development)
- NEP-ENT-2008-09-20 (Entrepreneurship)
- NEP-HEA-2008-09-20 (Health Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
- Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
- P. Connelly & S. Rosen, 2005. "Will Small And Medium Enterprises Provide Hiv/Aids Services To Employees? An Analysis Of Market Demand," South African Journal of Economics, Economic Society of South Africa, vol. 73(s1), pages 613-626, December.
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