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Resource acquisition and the complexity of social capital: Perspectives from women entrepreneurs in Tanzania and Pakistan
Mid Sweden University, Faculty of Human Sciences, Department of Business, Economics and Law.
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Women entrepreneurs all over the world contribute significantly to innovation, employment opportunities and wealth creation in their respective economies. Despite their importance as drivers of development, there is a lack of research on preconditions for women’s entrepreneurship. In particular, little attention has been given to women’s venturing in developing economies. This is troublesome, since women have the potential to play a crucial role in the development of any society, not least through venturing. Entrepreneurshiphas long been recognized as one of the keys to economic developmentand numerous studies have confirmed its economic value. At the same time, a lack of capital and other resources is a crucial constraint in starting and expanding new businesses, especially in developing economies where the financial markets are often underdeveloped or dysfunctional. Further,previous research shows that women entrepreneurs face particularly high obstacles when searching for capital and other resources, as they have to overcome both formal and informal barriers.

The aim of this thesis is to contribute to previous knowledge on women’s entrepreneurship in developing countries, by exploring and describing women entrepreneurs’ resource acquisition. The aim is further to explore the role of formal and informal institutions, as well as the role of social capital in relation to resource acquisition. The thesis is based on two field studies, conducted in two different developing contexts – Tanzania and Pakistan. Extended periods of time were spent in these contexts, where data were collected through semi-structured interviews, a questionnaire and participant observation. The focus is on how women entrepreneurs obtain access to financial and other resources. The focus is further on the role of formal and informal institutions in relation to women entrepreneurs as they acquire resources, and the role of social capital in resource acquisition. Special attention is given to contextual preconditions.

The results from the four papers of this thesis show that the studied groups of entrepreneurs use similar financial behavior. In both contexts, women have almost no access to formal capital from banks, and have to rely on informal sources of capital and resources, mainly from family members. In Tanzania, the microfinance sector plays an important role, and other semi-formal actors (e.g. SACCOs and RoSCAs) are commonly used as well. In Pakistan, the microfinance sector is less developed. There are semi-formal actors that can be used (such as so-called “committees”) but it is more common to use one’s own savings and loans or grants from family members. Further, results show that women entrepreneurs have to navigate through a complex interplay of barriers on both formal and informal levels. Although respondents in both contexts recognize that informal contacts (such as family members, friends, and social networks) are important sources of capital and other resources, they clearly express their desire for reliable, well-functioning, formal financial institutions. Lastly, results confirm that social capital is a crucial factor for entrepreneurs. As women in the studied contexts are excluded from formal finance, they are even more dependent on informal capital, and thereby their ability to use social capital. However, it is remarkable how often their social embeddedness is not only complex but counterproductive. Results show both negative outcomes of, and limited access to, social capital for the studied entrepreneurs.

Abstract [sv]

Över hela världen bidrar kvinnors företagande till att skapa innovationer, arbetstillfällen och ekonomiskt värde i sina respektive ekonomier. Trots att företagande kvinnor fyller en viktig funktion som pådrivare av utveckling, finns relativt lite forskning kring förutsättningar för kvinnors företagande. Detta gäller i synnerhet för utvecklingsländer, vilket är problematiskt, då kvinnor har potential att spela en avgörande roll för utveckling i alla samhällen, inte minst genom företagande. Entreprenörskap har sedan länge betraktats som en avgörande faktor för ekonomisk utveckling och en mängd studier har bekräftat entreprenörskapets ekonomiska värde. Brist på kapital och andra resurser är samtidigt en begränsande faktor för start och expansion av nya företag, speciellt i utvecklingsekonomier, där de finansiella marknaderna ofta är underutvecklade eller dysfunktionella. Tidigare forskning visar vidare att kvinnor som driver företag möter särskilt stora barriärer i sitt sökande efter kapital och andra resurser, samt att de tvingas hantera både formella och informella hinder.

Syftet med denna avhandling är att bidra till tidigare kunskap om kvinnors företagande i utvecklingsländer, genom att utforska och beskriva företagande kvinnors resursanskaffning. Syftet är vidare att utforska vilken betydelse formella och informella institutioner har, samt vilken betydelse socialt kapital har, i relation till resursanskaffning. Avhandlingen baseras på två fältstudier,vilka genomförts i två olika utvecklingskontexter – Tanzania och Pakistan. Studierna pågick under längre tidsperioder och data samlades in genom semistrukturerade intervjuer, en enkät och deltagande observation. Fokus är på företagande kvinnor och deras anskaffande av kapital och andra resurser. Vidare fokuseras vilken roll formella och informella institutioner spelar i relation till företagande kvinnors resursanskaffande, samt vilken roll socialt kapital spelar för resursanskaffandet. Särskilt uppmärksammas de kontextuella förutsättningarna.

Resultaten från de fyra artiklar som ingår i avhandlingen visar att de studerade grupperna av entreprenörer har liknande finansiella beteende. I båda kontexterna saknar kvinnor nästan helt tillgång till formellt kapital från banker och tvingas i stället förlita sig på informella källor till kapital och resurser, framför allt från familjemedlemmar. I Tanzania spelar mikrobankerna en viktig roll, tillsammans med andra semi-formella aktörer (exempelvis SACCOs och RoSCAs). I Pakistan är mikrofinanssektorn mindre utvecklad. Även där finns semi-formella aktörer att vända sig till (exempelvisså kallade ”committees”), men det är betydligt vanligare att använda egna besparingar och lån eller bidrag från familjemedlemmar. Vidare visar resultaten att företagande kvinnor tvingas navigera genom ett komplext nät av barriärer, både formella och informella. Respondenter i båda studerade kontexter ser informella kontakter (såsom familjemedlemmar, vänner och sociala nätverk) som viktiga källor till kapital och andra resurser. Trots detta uttrycker de tydligt att de efterfrågar kapital från pålitliga, väl fungerande, formella finansiella institutioner. Slutligen bekräftar resultaten tidigare studier, där socialt kapital påvisas vara av avgörande betydelse för entreprenörer. Eftersom kvinnor i de studerade kontexterna är exkluderade från formell finansiering, är de i än högre grad beroende av informellt kapital och därmed förmågan att använda socialt kapital. Det är dock anmärkningsvärt hur ofta de sociala strukturer som kvinnorna är inbäddade i, inte bara ärkomplexa, utan även direkt kontraproduktiva. Resultaten visar på både negativa effekter av, och begränsad tillgång till, socialt kapital för de studerade entreprenörerna.

Place, publisher, year, edition, pages
Sundsvall: Mid Sweden University , 2018. , p. 125
Series
Mid Sweden University doctoral thesis, ISSN 1652-893X ; 284
Keywords [en]
entrepreneurship, women entrepreneurs, financing, resource acquisition, social capital, context, developing countries, Tanzania, Pakistan, mixed methods research
Keywords [sv]
entreprenörskap, kvinnors entreprenörskap, finansiering, resursanskaffande, socialt kapital, kontext, utvecklingsländer, Tanzania, Pakistan, flermetodsforskning
National Category
Business Administration
Identifiers
URN: urn:nbn:se:miun:diva-33871ISBN: 978-91-88527-59-2 (print)OAI: oai:DiVA.org:miun-33871DiVA, id: diva2:1221924
Public defence
2018-09-21, F229, Campus, Kunskapens väg 8, Östersund, 13:15 (English)
Opponent
Supervisors
Available from: 2018-06-21 Created: 2018-06-20 Last updated: 2018-06-21Bibliographically approved
List of papers
1. Perceptions of financial sources among women entrepreneurs in Tanzania
Open this publication in new window or tab >>Perceptions of financial sources among women entrepreneurs in Tanzania
2015 (English)In: African Journal of Economic and Management Studies, ISSN 2040-0705, E-ISSN 2040-0713, Vol. 6, no 2, p. 197-218Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to empirically investigate how women entrepreneurs in Tanzania assess their accessibility to different external financial sources. The aim is further to discuss financial preferences among this group of entrepreneurs. Design/methodology/approach – The study is based on a unique database consisting of 114 firms, obtained by a questionnaire during 2009-2010. Differences between mean values on perceptions of financial sources were tested via a paired samples t-test. Findings – Overall, the empirical results provide support for the hypothesis that the sampled women entrepreneurs perceive semi-formal capital, such as loans from MFIs, SACCOS, ROSCAS and VICOBA, as the most accessible external capital. Governmental subsidies are ranked second, followed by informal capital, such as loans from family, friends and investors. As expected, loans from formal banks are ranked as the least accessible financing alternative. However, there are strong indications that the entrepreneurs in our study, if given a choice, would prefer external capital from formal sources, rather than semi-formal or informal capital. Practical implications – The authors suggest that the formal banks work to find ways to lower agency costs and thereby work for an inclusion of women entrepreneurs, and for the semi-formal financial actors to improve financial services in ways that better serve the entrepreneurs. Originality/value – The knowledge about attitudes and preferences concerning financial solutions among women entrepreneurs in developing countries is very limited. Results from this study is therefore important, as it adds to previous understanding, especially as this particular group of entrepreneurs have the potential to play an important role in the development of their regions. © Emerald Group Publishing Limited.

Keywords
Developing countries, Financial behaviour, Informal capital, Microfinance, Tanzania, Women entrepreneurs
National Category
Economics and Business
Identifiers
urn:nbn:se:miun:diva-25914 (URN)10.1108/AJEMS-10-2013-0090 (DOI)2-s2.0-84929861949 (Scopus ID)
Note

Export Date: 23 September 2015

Available from: 2015-09-23 Created: 2015-09-23 Last updated: 2018-06-20Bibliographically approved
2. Financial Barriers and How to Overcome Them: The Case of Women Entrepreneurs in Tanzania
Open this publication in new window or tab >>Financial Barriers and How to Overcome Them: The Case of Women Entrepreneurs in Tanzania
2017 (English)In: Entrepreneurship in Africa / [ed] Akinyoade, A., Dietz, T., & Uche, C., Leiden: Brill Academic Publishers, 2017, 1, p. 344-360Chapter in book (Refereed)
Place, publisher, year, edition, pages
Leiden: Brill Academic Publishers, 2017 Edition: 1
Series
African Dynamics, ISSN 1568-1777 ; 15
National Category
Economics and Business
Identifiers
urn:nbn:se:miun:diva-32556 (URN)10.1163/9789004351615 (DOI)978-90-04-34977-3 (ISBN)978-90-04-35161-5 (ISBN)
Available from: 2017-12-20 Created: 2017-12-20 Last updated: 2018-06-20Bibliographically approved
3. Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania
Open this publication in new window or tab >>Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania
2018 (English)In: Journal of small business management (Print), ISSN 0047-2778, E-ISSN 1540-627XArticle in journal (Refereed) Epub ahead of print
Abstract [en]

In interdependent social groups, microfinance traps occur when conflicts arise between borrowers' affective ties related to family needs and instrumental ties related to obligations toward their loan group. Thus, the social capital that facilitates microfinancing can lead to conflicting obligations toward business needs and economic obligations toward family. Building on an inductive field study among female entrepreneurs in Tanzania, we conceptualize microfinance traps. By using relational contract theory to interpret the qualitative data, we argue that microfinance traps can be reduced by balancing role integrity, preserving norms and reciprocity, and harmonizing the social matrix toward the family and loan group. 

National Category
Economics and Business
Identifiers
urn:nbn:se:miun:diva-33261 (URN)10.1111/jsbm.12407 (DOI)
Note

Version of record online:14 February 2018

Available from: 2018-03-14 Created: 2018-03-14 Last updated: 2018-06-20Bibliographically approved
4. Struggling with social capital: Pakistani women micro entrepreneurs' challenges in acquiring resources
Open this publication in new window or tab >>Struggling with social capital: Pakistani women micro entrepreneurs' challenges in acquiring resources
2017 (English)In: Entrepreneurship and Regional Development, ISSN 0898-5626, E-ISSN 1464-5114, Vol. 29, no 7-8, p. 759-790Article in journal (Refereed) Published
Abstract [en]

A crucial aspect of successful venturing is social capital. In contrast to traditional Western-oriented research where social capital is construed positively, we found that in the traditional, patriarchal society of Pakistan, social capital puts high restrictions on women micro entrepreneurs - where social capital prevents or slows venturing efforts. Results also show that although women do get some selective access to resources from family members, they are restricted by limited access to social capital outside of family members. As women entrepreneurs have the potential to play an important role in the development of any society, and especially so in developing countries, based on the insights derived from this qualitative study, we propose suggestions for further research on women micro entrepreneurs in non-Western contexts.

Keywords
Women entrepreneurs, social capital, context, resource acquisition, developing countries, Pakistan
National Category
Economics and Business
Identifiers
urn:nbn:se:miun:diva-31872 (URN)10.1080/08985626.2017.1349190 (DOI)000407626700009 ()2-s2.0-85025146577 (Scopus ID)
Available from: 2017-10-17 Created: 2017-10-17 Last updated: 2018-06-20Bibliographically approved

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