Entrepreneurial motivation and small business growth in Rwanda

Abstract

Purpose – The purpose of this study is to investigate the relationship between entrepreneurial motivation and small business growth in one of the poorest emerging countries: the African least developed country (LDC), Rwanda. Design/methodology/approach – On the basis of theoretical resources and a pre-study of interviews with local experts in Rwanda, the authors developed a survey for this study. Based on primary data from 133 Rwandan small business owners, the authors conducted an exploratory factorial analysis to uncover the underlying factors. Subsequently, the authors conducted regression analyses to test the hypotheses. Findings – The analyses show that the predictors for the growth of small businesses can be divided into three factors: one factor with a mix of motivations related to family background, necessity and opportunity motivations; one factor with items predominantly related to opportunity motivation; and one factor with items related to necessity motivation. The first factor has the strongest positive effect on small business growth followed by the second factor. The factor concerning necessity motivation was irrelevant for further inclusion in the regression model, due to insufficient reliability. Research limitations/implications – The study contributes to the debate in the literature about which entrepreneurial motivations affect the growth of small businesses in LDCs. Practical implications – The results reported in this study also have implications for how small business growth in LDCs can be supported and stimulated by policy-making practice. Originality/value – This study shows that entrepreneurial motivation is not a clear distinction between necessity and opportunity, but that a mix of motivations is important to assess the growth of small businesses in an LDC, which is an understudied context.