Regulations and institutions influence entrepreneurship. This paper investigates whether government regulations and finance institutions help or hinder entrepreneurial performance at the small firm level in Yaoundé and Douala, Cameroon. Performance is examined in terms of growth in sales revenue, profits and labor employment. The results show that ‘government regulations’ have a strong and significantly adverse impact on sales revenue performance. Furthermore, ‘awareness of source of funds’ is found to significantly amplify sales revenue, and profit performance. Government support is significant to growth in labor employment, sales revenue and profit. However, ‘government regulations’ have a consistently negative influence on performance, even when using different indicators. Consequently, Cameroon should provide a more conducive environment for entrepreneurship to flourish and for small firm sales revenue, profit and employment to grow through the simplification or removal of unnecessary regulations and a provision of greater financial support.
Entrepreneurship is an integral part of change and development, contributing positively to employment, poverty reduction and income growth. It flourishes in an institutional context of freedom rather than suppression. This paper examines the relationship between economic freedom, income and entrepreneurship in South Africa, using (1994–2019) time-series data. Economic freedom was measured by the Economic Freedom Index (FREE) as a proxy. Income and early-stage entrepreneurship were proxied by gross domestic product per capita (GDPC) and total entrepreneurial activity (TEA), respectively. Johansen cointegration tests and a vector error correction model (VECM) were used to estimate the short- and long-run associations between the variables. The results indicate a bi-directional short- and long-run cointegrating relationship between freedom and entrepreneurship; freedom is also found to be a significant predictor of GDPC in South Africa. Thus, improvements in real per capita GDP and economic freedom tend to enhance early-stage entrepreneurship, providing greater scope for business formations. Hence, a mindset change from radical economic transformation to pro-economic freedom might help in stimulating entrepreneurship.
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