FEMALE ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT IN SOUTH-EAST, NIGERIA

ABSTRACT

Female entrepreneurship is the process where female organise all the factors of production, undertake risks, and provide employment to others while Economic development is a process of societal advancement, where improvement in the well being of people are generated through strong partnership between all sectors, corporate bodies and other groups in the society. Female entrepreneurs face gender biases stemming from socio-economic factors or specific biases in laws such as inheritance laws. Female entrepreneurs have a problems of access to finance and credit facilities. Argument abound as to the impact of female entrepreneurship on economic development ;while some believe that female entrepreneurship impacts positively on the economy, others hold a contrary view. Empirical evidence from different countries has been used to substantiate these lines of argument, but in Nigeria works in this area have been scanty. Hence, this study is designed to fill the gap. By localizing the research with emphasis on the south East- Nigeria.The study investigated the relationship between Female entrepreneurship and economic development in South-East Nigeria. The study specific objective were to Identify the factors that motivate female entrepreneurs in starting their own businesses and the nature of relationship with economic development, Determin the challenges faced by female entrepreneurs in managing their businesses, in achieving food security , Assess the contributions female entrepreneurs make in employment generation, Analyse the roles of the government in assisting female entrepreneurs towards achieving wealth creation, Explore the effects of new ventures by female entrepreneurs on environmental sustainability and Examine the impact of female entrepreneurs’ education in achieving economic development of South-East Nigeria.The study adopted the survey design. The population of the study was 2520 female owned SMs in South East Nigeria.the sample size of 553 was obtained using Freund and Williams sample size determination method. Bowler formula for proportional allocation was used to select respondent in each of the state of Abia, Anambra, Ebonyi, Enugu and Imo. Data was collected using the designed questionnaire and oral interview guide. Face validity approach was done to ensure that the variable measured had content validity. The instrument was check for reliability using the Crobach’s alpha reliability method. The Crobach’s Alpha coefficient yielded 0.85, indicating the reliability of the instrument. The data collect was analysed using Pearson, Kendall, spearman and simple regression model. The findings indicated that: The  factors that motivate female entrepreneurs in starting their own businesses had a positive and significant relationship with Economic development (α = 0.234, p < 0.05, The challenges faced by female entrepreneurs in managing their businesses, had a positive and non-significant relationship with food security (α = 0.134, p > 0.05),  the contributions of female entrepreneurs had a   positive and significant impact on employment generation (α = 0.56, t-value = 3.007, R² = 0.084, Adj R² = 0.075, p < 0.05, F-statistic = 9.04, D.W = 1.804) .There is a positive and non significant relationship between the roles played by government in assisting female entrepreneurs towards achieving wealth creation ( α = 0.029, p > 0.05), New ventures by female entrepreneurs had a negative and non-significant effect on environmental sustainability (α = -0.027, t-value = -0.242, R² = 0.001, Adj R² = -0.01, p > 0.05, F-statistic = 0.058, D.W = 1.743 and female entrepreneurs’ education had negative and non-significant impact on the economic development of South-Eastern Nigeria (α = -0.017, t-value = -1.02, R² = 0.011, Adj R² = -0.00, p > 0.05, F-statistic = 1.04, D.W = 1.764). The study concluded among other things that better knowledge about the economic importance of female’s entrepreneurship and their particular strengths, weaknesses and opportunities, is important to success of females’ entrepreneurship. The study recommends among others that Government should increase the participation of female in the labour force by ensuring the availability of affordable child care and equal treatment in the work place.

TABLE OF CONTENTS

Approval                                                                                                                     i

Declaration                                                                                                                  ii

Dedication                                                                                                                  iii

Acknowledgements                                                                                                    iv

Abstract                                                                                                                      v

List of Tables                                                                                                viii

List of Figures                                                                                                             x

CHAPTER ONE:  INTRODUCTION

1.  Background of the Study                                                                              1
2. Statement of Problem                                                                                     5
3. Objectives of the Study                                                                                  6
4. Research Questions                                                                                         7
5. Research Hypotheses                                                                                      8
6. Significance of the Study                                                                               8
7. Scope of the Study                                                                                         9
8. Limitations of the Study                                                                                 9
9. Operational Definition of Key Terms                                                10

References                                                                                                      12

CHAPTER TWO: REVIEW OF RELATED LITERATURE

•  Introduction                                                                                                   14
• Conceptual Framework                                                                     14
• Concept of Entrepreneurship                                                            14
• Concept of  Economic Development                                                41
• Theoretical Framework  of the Study                                               53

2.6       Empirical Review                                                                             82

2.7       Summary of the Review of the Related Literature               86

References                                                                                                      88

CHAPTER THREE: RESEARCH METHODOLOGY

• Introduction                                                                                                    95
• Research Design                                                                                             95
• Sources of Data                                                                                              95
• Primary Sources                                                                                              95
• Secondary Sources                                                                                          95
• Population of the Study                                                                                  94
• Sample Size determination and Sampling Procedure                  96
• Description of Research Instruments                                                     98
• Validity of the Instrument                                                              98
• Reliability of the Instrument                                                             98
• Methods of Data Analysis                                                                              98

References                                                                                                      99

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

• Introduction                                                                                   100
• Data Presentation                                                                             100
• Data Presentation  of the Biodata of the Respondents              100
• Test of Hypotheses                                                                        108
• Discussion of Findings                                                                   120
• Implications of the Findings                                                           124

References                                                                                                      126

CHAPTER FIVE: SUMMARY OF MAJOR FINDINGS, CONCLUSIONS

AND RECOMMENDATIONS             

5.1        Summary of Major Findings                                                           128

5.2        Conclusion                                                                                       129

5.3       Recommendations                                                                             129

5.4       Contribution to Knowledge                                                            130

5.5       Suggestion for Future Research                                                          131

Bibliography                                                                                                   132

Appendixes                                                                                                     143

Questionnaire                                                                                                  144

Interview Guide                                                                                              149

Calculation of Cronbach Alpha Coefficient of Reliability                             151

Sample SMEs in South East, Nigeria                                                             152

LIST OF TABLES

Table  2.1:  Summary of the Historical Perspective of Entrepreneurship    17

Table 2.2:  Percentage (%)  Distribution of Persons by Industry in Nigeria    21

Table 2.3:  Showing the Status of Female’s Entrepreneurship        25

Table 2.4:  Female Enterprise Classification by Sector, Size and Year  26

Table 2.5:  Comparison of Male and Female Entrepreneurs’ Characteristics             30

Table 2.6: Gender –Related Development Index and Gender Inequality in

Economic Activity.                                                                                         31

Table 3.1: Proportional allocation of the SMEs in the south-East, Nigeria                 97

Table 4.1     Distribution and collection of questionnaire                 100

Table 4.2:  Age Distribution of the Entrepreneurs                                    100

Table 4.3:    Distribution of the Entrepreneurs According to Marital Status 101

Table 4.4:    Distribution of Entrepreneurs in the SMEs According to Years of

Operation                                                                                                      101

Table 4.5: Distribution of Entrepreneurs in the SMEs According to forms of  Business                                                                                                        102

Table 4.6:  Distribution of Entrepreneurs in the SMEs According to Methods of Acquisition of Business                                                                                102

Table 4.7:   Distribution of Entrepreneurs According to the Highest Educational Qualification                                                                      103

Table 4.8:    Distribution of Sources of Fund Open to the Entrepreneurs                 103

Table 4.9:  Distribution of Entrepreneurs according to sector of the business          104

Table 4.10: Distribution of the Entrepreneurs on Number of Employees of the SMEs                                                                                                             104

Table 4.11:   Distribution of Entrepreneurs Opinion on numbers of Existing Branches                                                                                                        105

Table 4.12:Entrepreneur’s Opinion on the factors that motivate female entrepreneurs In starting their own businesses in South East Nigeria            105

Table 4.13: Entrepreneur’s opinion on the challenges faced by female

entrepreneurs  in managing their businesses, in achieving food security in South-East Nigeria                                                                      106

Table 4.14: Entrepreneurs opinion on the contributions female entrepreneurs make in employment generation in South-East Nigeria      106

Table 4.15: Entrepreneur’s opinion on the role of the government in assisting female entrepreneurs towards achieving wealth creation in South-East Nigeria                                                                                     107

Table 4.16: Entrepreneur’s opinion on the effects of new ventures by

female entrepreneurs on environmental sustainability in South-East

  Nigeria                                                                                                         107

Table 4.17: Entrepreneur’s opinion on the impacts of female entrepreneur’s

education in achieving economic development of South-East Nigeria      108

Table 4.18: Pearson’s Correlation Result for Hypothesis one 109

Table 4.19: Kendall and Spearman Correlation Results for Hypothesis one 109

Table 4.20: Pearson’s Correlation for Hypothesis two                        110

Table 4.21: Kendall and Spearman Correlation Results for Hypothesis two             111

Table 4.22 Regression Summary for hypothesis three                112

Table 4.23 Regression Coefficient for hypothesis three             113

Table 4.24: Pearson’s correlation results for hypothesis four          114

Table 4.25: Kendall and Spearman Correlation Results for Hypothesis four             115

Table 4.26 Regression Model Summary for hypothesis five             116

Table 4.27 Regression Coefficient for hypothesis five                 116

Table 4.28 Regression Summary for hypothesis Six                         117

Table 4.29 Regression Coefficient for hypothesis Six                     118

Table 4.30 Regression Coefficient for hypothesis Six                        119

LIST OF FIGURES

Figure 2.3: The  Roles of females                                                            36

CHAPTER ONE

 INTRODUCTION

1.1    Background of the Study

For over a decade, the experience of Nigeria in the process of economic development has not been encouraging. Consequently female entrepreneurship is now seen to attract considerable amount of attention as a subject of academic debate (Cartel and Cannon, 2007). According to Veheul, Uhlioner and Thurk (2005), the growing interest in female entrepreneurship is attributable to the fact that female entrepreneurs are now considered important forces in economic development of their nations. This is not surprising as more than ever before, many females have been forced into alternative avenues of generating income, with a greater number of females setting up in business to balance work and family commitments (Kirk and Belovies, 2006). For example, Werter  (2004) notes that females in business are a growing force in the economy, and in transition environment, their contribution extends from the economic sphere to include the wider process of social transformation (Welter , 2006).

Okafor (2009) posits that the role assigned to entrepreneurship for economic growth and development especially in the developed economies such as USA, Britain, Japan, Canada and others made most developing economies to adjust their developmental concept and plan and see new enterprise development as very vital to their economic problems. Entrepreneurship as the engine of economic growth and wheel that pedals the vehicle of economic development has been recognized for its importance in the area of job creation, revenue generation, poverty alleviation and wealth creation. This concept is now identified as the central element in the theory of economic development (Schumpeter, 1994 and Josiane, 1998). It makes up the largest business sector in economies, and has been recognized as the driver of employment and economic growth (Culkin and Smith 2000, Peacock, 2004: Wang, Walker and Redmond, 2006).

Entrepreneurship is important for the support of small and medium enterprises (United Nations, 2006). With active small and medium enterprises (SMEs) sub-sector in the production process, developed and less developed countries are expected to depend less on large industries to drive their economy towards prosperity. This is because economic renewal and growth is expected to be increasingly driven within the vehicle of enterprise creation and the industry clusters. Entrepreneurship is therefore a process that involves a willingness to rejuvenate market forces, innovate, risks taking, trying out of new and uncertain products, services, and markets and being more proactive than competitors towards exploring new business opportunities (Civin and Slevin, 1991; Wiklund and Shepherd, 2005). It attracts both males and females who are interested in profitable inter-industry relationship. To ensure adequate development and competitiveness in entrepreneurship, considerable research has examined the participation of both males and females in venturing into business activities, particularly those reported to have personal dreams of entrepreneurship. This category has rapidly joined hands together to achieve success in business and enterprises development (Gelin, 2005).

Female entrepreneurs are therefore becoming increasingly important in the socio-economic development of both developed and developing economies as they account for significant percent of the operators of small and medium Enterprises (SMEs) (Josiane, 1998: Kjeldsen and Nielson, 2000). Female entrepreneurs make a substantial contribution to national economies through their participation in start-ups and their growth in small and medium businesses (United Nations, 2006). Their interest and activities in the economic growth and development especially in the area of SMEs have received outstanding interest of researchers. Global Entrepreneurship Monitor (GEM) (2005) confirmed that female participation in a wide range of entrepreneurial activities across the 37 GEM and their activities in different countries have paid off in form of many newly established enterprises for job and wealth creation. This notwithstanding, entrepreneurship is usually seen from the perspective of men driven economy (Gerlin, 2005; Josiane, 1998) due to its complexity, particularly its gender issues, the role of female entrepreneurship has not been properly documented.

While female entrepreneurship is a central aspect of economic development and public policy concern in most countries, scholarly research about their entrepreneurial activities is comparatively scarce. The role of entrepreneurs as agents in the labour market for creation of employment, wealth creation, poverty alleviation and provision of resources has helped tremendously to increase the number of female – owned entrepreneurial ventures in the world. The emergence of the private sector as the major participant/player in the industrial development of many countries has also improved females’ access in employment opportunities as against when they experienced denial in employment opportunities as wage workers because of their family responsibilities (Josiane, 1998).

To cope with these challenges, the development of self-employment, especially in the area of SMEs became the last resort for them (Thompson, 2002). SMEs contribute more than 50% to Gross Domestic Product (GDP) of most nations both developed and less developed (Oyekanmi, 2004: Uchechukwu, 2004; Ojo, 2006). Its contributions to economic development have been predominantly in the area of job creation, poverty alleviation, environmental vitality, wealth creation and human capital. Female entrepreneurs therefore account for more than half of the operators of SMEs sub-sector and they operate more often in the agricultural, manufacturing, trade and service sectors (Kjeldsen and Nielson, 2000; community, women and development (COWAD), 2004; Gelin, 2005). However, the operation of SMEs involves considerable risks, hard work, enormous sacrifice and sincerity of purpose which cut across various obstacles. The risks, challenges and obstacles (Ojo, 2004) perhaps affect female entrepreneurs more than their male counterparts, making their chances of success to be considerably lower than men (Hisrich and Brush, 1986). Considering the various challenges facing SMEs particularly in Nigeria which includes; capital inadequacy, unavailability of the required infrastructure, shortage of manpower to mention but few. Someone may quickly conclude that Females are usually discouraged from venturing into enterprise development. But today the story is a different one; females are starting and growing businesses at an unprecedented rate.

In USA, the analysis of gender creative businesses shows that the rate of growth of   female – owned businesses is twice that of men and this comprises more than 35% share of all entrepreneurial ventures. They generate over $2.3 trillion in annual revenue, and employ 18 million individuals (Bartol and Martin, 1998). In Nigeria, female entrepreneurs are considered as an integral part of economic growth. Their businesses contribute jobs, productive and distributive activities required for wealth creation both for family and nations’ economies (Soetan, 1997; Okunade, 2007). Female activities in entrepreneurship and SMEs enable them to effectively combine their productive and reproductive roles because of the flexibility in hours of work which permit them to care for their children and also contribute substantially to economic growth (Soetan, 1997). This has made females to be regarded as the central focus of the economic development and public policy concern (Bagby, 2005).

Females were reported to be in charge of majority of activities in Africa (UNIDO, 2008). This finding is also reflected in various studies which indicates that female, own and operate around one – third of all businesses in the formal sector, and they represent the majority of businesses in the informal sector (Bardasi, and Baumol, 2007; World Bank, 2007; Aderemi Ilori, Siyanbola,  Adegbite, and Abereij 2008). Females’ productive activity, particularly in industry empowers them economically and enables them to contribute more to overall development. Whether they are involved in small and medium scale activities in the informal or formal sector, women’s entrepreneurial activities are not only a means for economic survival but also have a positive social repercussion for the women themselves and their social environment (UNIDO, 2001). In – spite of such remarkable reports, the reality of the situation in many African and transition economies is that female entrepreneurs consistently struggle and remain dormant (Nichter and Goldmark, 2009).In Nigeria for example, the promotion of women is disappointing, and their contribution overlooked as a result of the systematic neglect by society as a whole. In addition, their participation and role within the wider entrepreneurial setting is constantly undermined, resulting in the gross underestimation of women’s socio-economic contribution to the economy and under-utilization of women’s tremendous potentials (Woldie and Adersua, 2004). Furthermore, female entrepreneurs in Nigeria are faced with a myriad of obstacles and challenges, and the lack of support from government and non-governmental agencies further impedes their entrepreneurial effort. Each year as students in Nigeria graduate from high schools and universities there is rush of individuals into the labour market. The problem is highlighted when the number entering the labour market is estimated to be in excess of 520,000 potential entrants per annum (Kwaja, 2012). When one considers the options available to these people, entrepreneurship will not only offer employment but will create jobs which are needed in our country. Throughout the world entrepreneurship is seen as one of the most important solutions to unemployment, poverty and low economic growth in any country.

All over the globe, female entrepreneurship contributes to stability, to well-being among communities, and provides economic opportunities for disadvantaged groups including women, low wage earners, and minorities. Another contribution is the creation of wealth as well as employment. Many women in developing countries remain illiterate and live in poor communities. This situation does not prevent them from participating in local economies and becoming entrepreneurs. Tiny enterprises enable them to improve their lives and those of many others by creating new jobs. The participation of women in economic life in developing countries contribute to a more human, cooperative, balanced and pleasant work environment in women-led enterprises, in which individual development is engraved. Hisrish and Brush, (1988) argue that an increasing number of women are seeking to penetrate the world of entrepreneurship, although this activity entails many risks, and the expenditure of time and energy.         

In this study, it is thus imperative to explore why there are still a relatively small number of female entrepreneurs in comparison to their male counterparts in Nigeria and to determine whether the country is aligned with global initiatives to promote Female entrepreneurship.Also, in reaction to the research report of Schuttle, Boshoff and Bennett (1995) which suggested that male entrepreneurs have been extensively studied and the focus should now be shifted to the study of female entrepreneurs. It is upon this premise that this research work emerged.

Statement of Problem

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