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Micro-entrepreneurship in a hostile environment: evidence from Indonesia

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  • Virginie Vial

Abstract

The contribution of micro-entrepreneurship to development has featured prominently in recent economic and policy debates. Using panel data from the Indonesia Family Life Survey over a long period (1993-2007) marked by an important economic crisis in 1997, this paper investigates the impact of financial, human and social capital on households' participation in micro-entrepreneurship, while accounting for corruption as well as institutional and infrastructure quality. Larger urban households that have greater financial and social capital, and/or whose members have an elementary or secondary education, are more likely to participate. Corruption at the local parliament and local government levels reduces the number of participants, while higher-quality formal institutions and infrastructure boost entrepreneurship. The period is marked by a rise in participation in 2000, but communities that experienced a loss in well-being due to the crisis were less likely to participate in micro-entrepreneurship.

Suggested Citation

  • Virginie Vial, 2011. "Micro-entrepreneurship in a hostile environment: evidence from Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 47(2), pages 233-262.
    • Handle: RePEc:taf:bindes:v:47:y:2011:i:2:p:233-262
    DOI: 10.1080/00074918.2011.585952
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    References listed on IDEAS

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    1. Thurik, A.R., 2008. "Entrepreneurship, Economic Growth and Policy in Emerging Economies," ERIM Report Series Research in Management ERS-2008-060-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    Cited by:

    1. Julien Hanoteau & Virginie Vial, 2020. "Institutional quality, conforming and evasive entrepreneurship," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 97-121, March.
    2. Kartika, Metasari, 2019. "Public Service and Micro-Small Enterprise Developments in Indonesia," MPRA Paper 91577, University Library of Munich, Germany.
    3. Soluk, Jonas & Kammerlander, Nadine & Darwin, Solomon, 2021. "Digital entrepreneurship in developing countries: The role of institutional voids," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    4. Huasheng Zhu & Yawei Chen & Kebi Chen, 2019. "Vitalizing Rural Communities: China’s Rural Entrepreneurial Activities from Perspective of Mixed Embeddedness," Sustainability, MDPI, vol. 11(6), pages 1-21, March.
    5. Ramendra Singh & Tahir Wani & Saiyed Wajid Ali & Apoorv Khare, 2021. "Conflict-induced entrepreneurial resilience, self-efficacy and the new social compact: a study of BoP micro-entrepreneurs in conflict zones," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(3), pages 309-326, September.
    6. Welsh, Dianne H.B. & Kaciak, Eugene & Shamah, Rania, 2018. "Determinants of women entrepreneurs' firm performance in a hostile environment," Journal of Business Research, Elsevier, vol. 88(C), pages 481-491.
    7. Kaciak, Eugene & Welsh, Dianne H.B., 2020. "Women entrepreneurs and work–life interface: The impact of sustainable economies on success," Journal of Business Research, Elsevier, vol. 112(C), pages 281-290.
    8. Vial, Virginie & Hanoteau, Julien, 2015. "Returns to Micro-Entrepreneurship in an Emerging Economy: A Quantile Study of Entrepreneurial Indonesian Households’ Welfare," World Development, Elsevier, vol. 74(C), pages 142-157.
    9. Mujtaba Ahsan, 2020. "Entrepreneurship and Ethics in the Sharing Economy: A Critical Perspective," Journal of Business Ethics, Springer, vol. 161(1), pages 19-33, January.
    10. Rothenberg, Alexander D. & Gaduh, Arya & Burger, Nicholas E. & Chazali, Charina & Tjandraningsih, Indrasari & Radikun, Rini & Sutera, Cole & Weilant, Sarah, 2016. "Rethinking Indonesia’s Informal Sector," World Development, Elsevier, vol. 80(C), pages 96-113.

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