Call edition 2012

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Entrepreneurship and growth of entrepreneurial firms in Ivory Coast

Micheline GOEDHUYS researcher laureate
micheline.goedhuys@skynet.be

°1968 Belgium
Licence in applied economic sciences, 1990

Entrepreneurship and growth of entrepreneurial firms in Ivory Coast

In this paper, the author addresses two questions related to entrepeneurship. Firstly, she examines what the characteristics are that distinguish entrepeneurs from salaried workers. Secondly, she looks into the determinants of growth and success of firms in Côte d’Ivoire.
The author uses original and unique data, concerning the socio-economic and personal characteristics of entrepeneurs and employees working in the manufacturing sector in Côte d’Ivoire. From a logit analysis, human capital, whether as high level formal education or as on the job training during an apprenticeship, was highlighted as an important distinguishing characteristic between entrepreneurs and workers. In addition, the financial status also has a significant impact on the occupational status. Wealthier individuals are more likely to become an entrepeneur, which the author correctly identifies as supportive evidence for the presence of liquidity constraints during the start-up of new firms, especially in countries with a less developed financial sector.
Concerning the factors explaining firm success or failure, specific formal education (rather than human capital in general) influences gradually and positively the firm’s growth performance, next to formal registration, which lowers transaction costs and increases transparency.
The results of the paper also provide interesting findings from a policy perspective. It points to the need of an integrative approach, if one wants to support entrepeneurship in developing countries. The provision of capital funds should be linked to efforts to upgrade managerial capabilities and facilitation of formal legitimacy and transparency of firms.

report by Prof. Dr. G. Rayp, General Economics, Faculty of Economics and Business Administration, Universiteit Gent, Belgium