The majority of entrepreneurs in low-income countries tend to be subsistence entrepreneurs focusing on basic survival rather than profitability and firm expansion. Many researchers have tried to explain this phenomenon by identifying institutional constraints to entrepreneurship such as access to capital, credit, or formal registration. But while the body of literature on these issues is growing rapidly, the number of studies examining the importance of entrepreneur characteristics such as educational attainment or business skills for micro-enterprise expansion remains relatively low. This study aims will contribute to fill this knowledge gap, focusing on Chad, a post-conflict country where especially little work has been done on the topic.
Using the Third Chadian survey on consumption and informal sector (ECOSIT III), the research team will investigate the relationship between entrepreneurs’ socio-demographic characteristics (education, age, sex, experience) and the performance of Micro, Small and Medium Enterprises (MSMEs) in Chad’s largest cities. The researchers will measure MSME performance by survival rates and profit levels – the variables available in the ECOSIT survey. The study’s specifications will also control for a set of variables susceptible to impact firm performance, such as initial start-up capital, macroeconomic factors (e.g. private investment regulations, competition in the local markets, etc), access to social capital (e.g. access to family labor, business networks), and factors related to the internal efficiency of small businesses (e.g. whether the employees received business training, working hours, etc).
Relevant policy implications could be drawn from this study by helping the Chadian government and its partners understand the link between entrepreneurs’ profiles and MSME performance.
Authors
