When does the Socio-cultural Context Matter? Communal Orientation and Entrepreneurs' Resource Accumulation Efforts in Africa

• Main Authors: KHAYESI, Jane N. O., GEORGE, Gerard
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: African Studies; Business; Entrepreneurial and Small Business Operations
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4678; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5677/viewcontent/Khayesi_et_al_2011_Socio_cultural_Africa.pdf
• Institution: Singapore Management University

We examined the effect of entrepreneurs’communal orientation and social capital on entrepreneurs’ acquisition of resources, and the cost of raising those resources. Using an errors-in-variables estimation in a sample of 242 Ugandan entrepreneurs from Kampala, we find that shared identity is positively associated with the quantity of resources raised by entrepreneurs, whereas shared identity and communal orientation are associated with a higher cost of raising resources. Further, communal orientation positively moderates the relationship between kin composition and the quantity of resources raised; whereas communal orientation negatively moderates the relationship between trust, shared identity, and resources. In contrast, a high communal orientation is associated with increased cost of raising resources when shared identity is high. These findings reveal that entrepreneurs’ socio-cultural contexts, particularly communal orientation, has a moderating effect on the relationship between entrepreneurs’ social capital and resource accumulation.