The Effect of Social Norms on the Relationship between Social Capital and the Intent to be an Entrepreneur

Background

Many African cities have developed into centers of social and economic entrepreneurship where young Africans can create their own destinies and find regional answers to social problems. Entrepreneurship is touted by the UN as a means for involving young people in development processes, especially considering decreased public spending on social services and employment in the African public sector. Despite these encouraging developments, little is known about how the intention to start entrepreneurial ventures is socially determined. Developing such knowledge could lead to ways to better foster the growing trend towards locally determined entrepreneurship.

Methods

The study utilized the 2018 Global Entrepreneurship Monitor (GEM) data. We selected a subsample of participants from 5 African countries – Egypt, Angola, Morocco, Madagascar, and Sudan – resulting in a final, analytic N of 6,045 survey respondents from these countries. We estimated binary logistic regression models to examine the effects of family size, knowing another person or group who are into entrepreneurship, and the perceived availability of opportunities on entrepreneurial intentions. We also explored how these relationships were moderated by media attention, perceived social status, and perceived attractiveness of entrepreneurial activities. The logistic models controlled for; age, education, income, gender, working status, and fear of failure and survey design effects owing to sampling probabilities and clustering.

Results

The study revealed that females were 15% (aOR=1.15, p<.001) more likely to start a future entrepreneurial venture compared with their male counterparts. Only respondents with graduate experience (aOR=1.67, p< 0.01) were significantly more likely to start a business in the future compared to those without lower or no education. The study also found that those who perceived opportunities for starting a business in the next six months were more than twice as likely (aOR=2.36, p<0.01) to start a future business compared with those who did not perceive such opportunities. Respondents who saw media attention given to those who had started a new entrepreneurial venture (aOR=2.57, p < 0.01), those who believed starting a new business would enhance their social status (aOR=1.67, p< .001), and higher ratings of the perceived desirability or entrepreneurship (aOR=1.69, p <0.00) also increased the chances of a person intending to start a new future business. Knowing another entrepreneur, however, did not significantly impact one’s decision to start a business in the future. Among the interaction effects tested, only media coverage as moderator of social capital was statistically significant (aOR=0.56, p < .001).

Conclusions and Implications

The results indicate that while the perceived desirability of entrepreneurship in society does not interact with social capital, media coverage does. The findings also suggest that families need to be better educated on the benefits of entrepreneurship to ease access to capital for relatives who want to start an entrepreneurial venture. Additionally, governments and other social bodies in charge of employment should encourage entrepreneurial ideas through public education using the media to motivate individuals to venture into entrepreneurial ideas. Such efforts could help ease Africa’s unemployment problems and help foster sustainable development.