UNDERSTANDING THE CONNECTION BETWEEN TOTAL EARLY-STAGE ENTREPRENEURIAL ACTIVITY RATE AND ENTREPRENEURIAL BEHAVIOR IN SOUTH AFRICA

Abstract

While there has been debate among scholars regarding the issues facing policy makers in the field of entrepreneurship, it is widely acknowledged that this phenomenon contributes greatly to national productivity, growth, youth empowerment, and employment. Sophisticated estimation techniques, such as the total early-stage entrepreneurial activity (TESEA) rate, have become prominent in entrepreneurship development literature. This study investigates the impact of South Africa’s TESEA rate on economic development, unemployment, prevailing macroeconomic conditions, the level of foreign direct investment, and periodic capital market adjustments. Various indices have been used to measure economic growth and national development, leading to distortions in estimates. Small and medium enterprises contribute about 36.1% of South Africa’s GDP and employ approximately 68.2% of the workforce in the private sector, making it worthwhile to study entrepreneurial behavior and tendencies, while multinational enterprises have also helped to sustain growth and productivity. The economies of most developing nations have inefficient allocation and distributive frameworks leading to a vicious cycle of poverty that contrasts with the virtuous cycle of development that exists in developed markets. This paper proposes a multidisciplinary perspective to fill gaps in current literature and contribute to theoretical development in entrepreneurship studies