Interaction between ethnicity and entrepreneurship in South Africa : Case study of Naledi Municipality

Abstract

This study was carried out to examine the interaction between ethnicity and entrepreneurship in a South African setting. Specifically, a survey using a questionnaire was carried out to determine the influence ethnicity has on entrepreneurial behaviour and attitudes among the Tswana, Afrikaner, Coloured and Indian entrepreneurs in the Naledi Local Municipality in the North West Province of South Africa.

A literature review preceded the empirical study to fully comprehend the theoretical and conceptual underpinnings of the interaction between ethnicity and entrepreneurship among different ethnic groups. In the empirical study phase, a questionnaire was administered to 400 randomly selected entrepreneurs in order to collect data on their motives for starting business, source of start-up capital and their attitudes/behaviours regarding risk in business. Waldinger et al.'s (1996) structure, enclave, cultural and situation theories were used as the theoretical base. Out of a total of 400 questionnaires that were distributed, 338 were usable representing an 84.5% response rate.

The chi-square tests found significant differences (p < 0.05) between the four ethnic groups on all the key dimensions of ethnicity on entrepreneurship and the success/performance of the four ethnic groups in business. The chi-square test shows that businesses operated/owned by Afrikaner and Indian ethic groups are more likely to perform better than those owned and operated by their Tswana and Coloured counterparts.