The Tangled Historical Roots of Entrepreneurial Growth Aspirations

We analyse the relationship between history, institutions and entrepreneurial growth aspirations (EGA). We consider two research questions. First, what configurations of historical and geographic dimensions influence high aspiration entrepreneurial outcomes? Our theoretical framework combines geography (coastal location, resource dependence); long term colonial history (ethnic heterogeneity; legal origins) and postcolonial history (low levels of conflict and population displacement; not having ‘bad neighbours’). We employ abductive reasoning to link the social science and historical literatures via analytically structured histories of three African countries: Ghana, Nigeria and Angola. Next, we undertake a fuzzy set qualitative comparative analysis (fsQCA) to address our second research question: which particular configurations of these dimensions are important for high growth aspiration entrepreneurship? We contribute to entrepreneurial theory by demonstrating the importance of configurations over individual variables, and by adding new context-bound dimensions to the study of entrepreneurship in less researched settings of developing countries, through historical analysis.Executive summaryWe focus attention on sub-Saharan Africa (SSA) because this region has been relatively neglected in the management literature yet has enormous economic potential for businesses going forward. Thus, it represents the third largest populated area after China and India, with a population across 46 states expected to rise to 2.7 billion by 2060. Moreover, SSA has the youngest population in the world, with a population pyramid conducive to entrepreneurship. We try to understand this variety in growth potential by considering the differences in entrepreneurial dynamism, and the factors explaining them. We argue that differences between countries in terms of entrepreneurial growth aspirations are shaped by configurations of three factors: long- and short-term history and location. We find ‘good’ outcomes to be associated with configurations where some negative aspects are more than compensated by positive ones. For example, for Angola, the positive impact of coastal location and relatively low ethnic heterogeneity counterbalance the negative effect of resource rents. For Botswana, the low levels of internal conflict compensate for unfavourable location. Resource-driven economies are more entrepreneurial, which suggests, at least in the SSA context, that better economic opportunities can sometimes result despite (or even because of) having extractive industries. EGA in Africa are not only rooted in the distant past; its prevalence is also affected by the specific recent factors in national postcolonial histories. This also includes the impact of neighbouring countries. The dimension that contributes to explanation of both ‘good’ and ‘bad’ entrepreneurial growth aspirations outcomes is the absence or presence of bad neighbours. In that sense, geography matters again: for African entrepreneurs it is not only relevant what happens in their own countries; the opportunities they face are also strongly influenced by their neighbours. Our analysis may offer entrepreneurs a template for identifying potential opportunities and threats in the environment in which that operate and to calibrate their strategies for scaling up and growth.