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Too Sick To Start: Entrepreneur'S Health And Business Entry In Townships Around Durban, South Africa

  • LI-WEI CHAO

    ()

    (Population Studies Center, University of Pennsylvania, 3718 Locust Walk, McNeil 239, Philadelphia, Pennsylvania 19104-6298, USA)

  • HELENA SZREK

    ()

    (Centre for Economics and Finance, University of Porto, Rua Dr. Roberto Frias, Porto, 4200-464, Portugal)

  • NUNO SOUSA PEREIRA

    ()

    (University of Porto Business School, Rua de Salazares 842, Porto, 4149-002, Portugal; Centre for Economics and Finance, University of Porto, Rua Dr. Roberto Frias, Porto, 4200-464, Portugal)

  • MARK V. PAULY

    ()

    (Health Care Systems Department, The Wharton School, University of Pennsylvania, 3641 Locust Walk, Philadelphia, Pennsylvania 19104, USA)

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 makes most 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 in the production process. Following a cohort of respondents in townships around Durban, South Africa, over a three-year period, we examined the relationship between an individual's physical health and the decision to start a business. Our results suggest 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 who later opened businesses during the study interval were significantly more likely to have better baseline health than those respondents who never started a new business. Hence, good health among entrepreneurs seems to be an important prerequisite to small business entry.

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

Volume (Year): 15 (2010)
Issue (Month): 02 ()
Pages: 231-242

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Handle: RePEc:wsi:jdexxx:v:15:y:2010:i:02:p:231-242
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