Wealth inequality and entrepreneurial activity in South Africa Online publication date: Mon, 12-Oct-2020
by Boris Urban
International Journal of Sustainable Economy (IJSE), Vol. 12, No. 2, 2020
Abstract: The article investigates the relationship between wealth inequality and entrepreneurial activity. It is widely recognised that South Africa's main sustainability issues remain it's extremely high inequality. Within the framework of sustainable development lies sustainable enterprise development where entrepreneurship has been shown to contribute considerably to sustainability through job creation, economic growth and more equal income distribution. The study relies on panel data, namely the South African National Income Dynamics Study to formally test the study hypotheses. Results indicate that increased wealth inequality is not significantly increasing entrepreneurship activity in South Africa. However there is a positive and significant relationship between wealth inequality and entrepreneurship for those at the bottom of the wealth distribution. The study makes an important contribution by highlighting that public policy aimed at increasing entrepreneurship while decreasing inequality may not be entirely consistent, given the complex relationship between wealth inequality and entrepreneurial activity.
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