Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia
Researchers have recently been asking why Asian and European minorities in Africa seem to be more successful in business than are people of indigenous ethnicity. The author draws attention to the significant disparity in business ownership and perf...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/01/891744/indigenous-ethnicity-entrepreneurial-success-africa-some-evidence-ethiopia http://hdl.handle.net/10986/19719 |
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okr-10986-197192021-04-23T14:03:44Z Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia Mengistae, Taye ANNUAL GROWTH RATE ATTENTION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BUSINESS CYCLE DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT RESEARCH ECONOMIC DEVELOPMENT ECONOMICS EDUCATIONAL ATTAINMENT EMPIRICAL STUDIES EMPLOYMENT ENTREPRENEURSHIP ERROR TERM ERROR TERMS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS ETHNIC GROUPS GROWTH EQUATION GROWTH PERFORMANCE GROWTH RATE GROWTH RATES HUMAN CAPITAL LABOR FORCE LONG RUN MARGINAL EFFECT MOTIVATION PARENTS PERCEPTION POLICY RESEARCH POLITICAL ECONOMY POOR GROWTH PRIVATE SECTOR R&D RANDOM VARIABLES RESEARCH WORKING PAPERS RESEARCHERS STANDARD DEVIATION SURVEY DATA TECHNIQUES UNEQUAL DISTRIBUTION VOCATIONAL TRAINING WORK EXPERIENCE WORKERS Researchers have recently been asking why Asian and European minorities in Africa seem to be more successful in business than are people of indigenous ethnicity. The author draws attention to the significant disparity in business ownership and performance that seems to exist among African ethnic groups as well. After analyzing a random selection of small to medium-size manufacturers in Ethiopia, he finds that establishments owned by an indigenous minority ethnic group, the Gurage, typically perform better than those owned by other (major or minority) groups. Other things being equal, Gurage-owned businesses are normally large, partly because they are bigger as start-ups and partly because they grow faster. And yet Gurage business owners are the least educated ethnic group in the sample. Because the size and growth rate of a business also increases with the entrepreneur's education, the performance of other businesses would have been even worse if their owners hadn't been better educated than the Gurage. Indeed, dropping education variables from the size determination equation drastically reduces the estimated advantage of Gurage-run businesses. This suggests that the observed effect of ethnicity could be indicative of intergroup differences in unmeasured ability. More important, it means that whether or not the effect will persist in the long run will depend on the trend in interethnic differences in investment in education. 2014-08-26T20:16:44Z 2014-08-26T20:16:44Z 2001-01 http://documents.worldbank.org/curated/en/2001/01/891744/indigenous-ethnicity-entrepreneurial-success-africa-some-evidence-ethiopia http://hdl.handle.net/10986/19719 English en_US Policy Research Working Paper;No. 2534 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Ethiopia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ANNUAL GROWTH RATE ATTENTION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BUSINESS CYCLE DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT RESEARCH ECONOMIC DEVELOPMENT ECONOMICS EDUCATIONAL ATTAINMENT EMPIRICAL STUDIES EMPLOYMENT ENTREPRENEURSHIP ERROR TERM ERROR TERMS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS ETHNIC GROUPS GROWTH EQUATION GROWTH PERFORMANCE GROWTH RATE GROWTH RATES HUMAN CAPITAL LABOR FORCE LONG RUN MARGINAL EFFECT MOTIVATION PARENTS PERCEPTION POLICY RESEARCH POLITICAL ECONOMY POOR GROWTH PRIVATE SECTOR R&D RANDOM VARIABLES RESEARCH WORKING PAPERS RESEARCHERS STANDARD DEVIATION SURVEY DATA TECHNIQUES UNEQUAL DISTRIBUTION VOCATIONAL TRAINING WORK EXPERIENCE WORKERS |
| spellingShingle |
ANNUAL GROWTH RATE ATTENTION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BUSINESS CYCLE DESCRIPTIVE STATISTICS DEVELOPMENT ECONOMICS DEVELOPMENT RESEARCH ECONOMIC DEVELOPMENT ECONOMICS EDUCATIONAL ATTAINMENT EMPIRICAL STUDIES EMPLOYMENT ENTREPRENEURSHIP ERROR TERM ERROR TERMS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS ETHNIC GROUPS GROWTH EQUATION GROWTH PERFORMANCE GROWTH RATE GROWTH RATES HUMAN CAPITAL LABOR FORCE LONG RUN MARGINAL EFFECT MOTIVATION PARENTS PERCEPTION POLICY RESEARCH POLITICAL ECONOMY POOR GROWTH PRIVATE SECTOR R&D RANDOM VARIABLES RESEARCH WORKING PAPERS RESEARCHERS STANDARD DEVIATION SURVEY DATA TECHNIQUES UNEQUAL DISTRIBUTION VOCATIONAL TRAINING WORK EXPERIENCE WORKERS Mengistae, Taye Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| geographic_facet |
Africa Ethiopia |
| relation |
Policy Research Working Paper;No. 2534 |
| description |
Researchers have recently been asking
why Asian and European minorities in Africa seem to be more
successful in business than are people of indigenous
ethnicity. The author draws attention to the significant
disparity in business ownership and performance that seems
to exist among African ethnic groups as well. After
analyzing a random selection of small to medium-size
manufacturers in Ethiopia, he finds that establishments
owned by an indigenous minority ethnic group, the Gurage,
typically perform better than those owned by other (major or
minority) groups. Other things being equal, Gurage-owned
businesses are normally large, partly because they are
bigger as start-ups and partly because they grow faster. And
yet Gurage business owners are the least educated ethnic
group in the sample. Because the size and growth rate of a
business also increases with the entrepreneur's
education, the performance of other businesses would have
been even worse if their owners hadn't been better
educated than the Gurage. Indeed, dropping education
variables from the size determination equation drastically
reduces the estimated advantage of Gurage-run businesses.
This suggests that the observed effect of ethnicity could be
indicative of intergroup differences in unmeasured ability.
More important, it means that whether or not the effect will
persist in the long run will depend on the trend in
interethnic differences in investment in education. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Mengistae, Taye |
| author_facet |
Mengistae, Taye |
| author_sort |
Mengistae, Taye |
| title |
Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| title_short |
Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| title_full |
Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| title_fullStr |
Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| title_full_unstemmed |
Indigenous Ethnicity and Entrepreneurial Success in Africa : Some Evidence from Ethiopia |
| title_sort |
indigenous ethnicity and entrepreneurial success in africa : some evidence from ethiopia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/01/891744/indigenous-ethnicity-entrepreneurial-success-africa-some-evidence-ethiopia http://hdl.handle.net/10986/19719 |
| _version_ |
1764440442049396736 |