The interplay between institutional factors and experience as determinants of employment growth in South African SMEs Online publication date: Mon, 10-Feb-2020
by Boris Urban
International Journal of Business and Globalisation (IJBG), Vol. 24, No. 1, 2020
Abstract: Past studies report that idiosyncrasies in the institutional arrangements of emerging economies contrast with those of developed market economies. The paper empirically examines the influence of the regulatory, normative and cognitive institutional environments on enterprise employment growth in South Africa (SA). Rather than merely testing the institutional and enterprise growth link, a more nuanced approach is adopted to show how the different institutional dimensions interact with experience to increase overall employment growth. 177 SMEs in SA are surveyed, with a focus on the manufacturing sector, as it holds promise of creating jobs. Results support the hypotheses where each of the institutional dimensions as well as experience, explain a significant amount of variance in employment growth. The study has contextual relevance, as SMEs in SA closely monitor changes in regulations as well as societal values towards entrepreneurship, when growing their enterprises.
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