Coping mechanisms of African immigrant entrepreneurs in the small business sector in Southern Africa

Abstract

The role of immigrant entrepreneurs in the economic development of nations is worthy of some acknowledgement. This is because, like many other entrepreneurs, they contribute towards the productivity of the country. However, it is common knowledge that immigrant entrepreneurs confront many challenges, some not unrelated to their immigrant status and this makes it difficult for such businneses to survive, let alone grow. It is against this background that the study sought to determine the components of the coping mechanism of an African immigrant entrepreneur operating in the SADC region. Based on scholarly positions gleaned from extant literature, a preliminary conceptual framework comprising human capital, economic capital and social capital constructs was developed. Each construct was made up of a number of independent variables, which according to the study‘s hypotheses would lend themselves to the coping ability of immigrant entrepreneurs, which was represented by the independent proxy measure of increase in employment. This study was executed from a positivism philosophical standpoint and was largely quantitative in nature. The study population was made up of immigrants operating in the retail, service and manufacturing industry within the small business sector in South Africa (Johannesburg and Pretoria), Swaziland (Manzini and Mbabane) and Mozambique (Maputo and Boane). In the absence of a valid sampling frame, non-probability sampling method of convenience and snowball was used. The instrument for data collection was a questionnaire and 2500 of these were distributed across three countries in the SADC region. . The data was collected in a cross-sectional manner and the study realised a 33% response rate, which is not uncharateric of small business research. Descriptive analysis was relied upon for discussions of the demographic characteristics of the participants. Inferential statistics formed the basis for many of the conclusions drawn by the study. CFA was utilised to validate the measurement tool to test the goodness-to-fit. Results obtained encouraged modifications to the model to achieve a better fit. The study‘s findings point to the reality that the human capital, economic capital and social capital constructs are associated with the coping ability of African immigrant entrepreneurs. In effect, investements in the building of these capitals are likely to imbue the African immigrant entreopreneur with a higher capacity to cope with his/her small business. More specifically, the study curiously found that amongst the population studied, the independent variables of previous experience, risk-taking propensity, business location, financial bootstrapping and networking had no correlation with coping ability. Conversely, the study established that managerial skills, level of education, business services and local language proficiency showed statistically significant relationships with the coping ability. These results are instructive for African immigrant entrepreneurs and other stakeholders desirous of supporting immigrant entrepreneurship in South Africa, Swaziland and Mozambique. It draws attention to the need for investments in effort to be made in the specific areas of equipping them with managerial skills, enhancing the level of education of immigrant entrepreneurs, improving their access to business support facilities and developing their local language proficiency.