Abstract
This paper seeks to understand an entrepreneur’s decision to either the services or manufacturing sectors of the Ghanaian economy. This objective is significant because it provides an extension of current stream of literature, specifically, the Evans and Jovanovic (EJ) Model which focuses largely on an entrepreneur’s decision to start a business. The study seeks to understand the industry choice of an entrepreneur by adopting the entrepreneurial orientation concept as its theoretical base. Data for the study is collected from entrepreneurs in Accra, Ghana and analysed by means of structural equation modelling precededwhich is by a confirmatory factor analysis of the entrepreneurial orientation (EO) scale. The estimation results indicate that, entrepreneurs with high risk-taking thresholds are more likely to enter into the manufacturing sector while innovative individuals are more likely to enter into the services sector. Proactiveness is not seen to be significant. The results show that an entrepreneur’s personal characteristics influence the choice of industry he or she will participate in.
Highlights
Entrepreneurial choice as part of the entrepreneurship literature has gained significant attention since the work of Evans and Jovanovic (1989)
Harada and Kijima (2005) have attempted to provide an explanation into the Evans and Jovanovic (EJ) Model by indicating that consumption of leisure influences entrepreneurial choice and Acheampong Journal of Global Entrepreneurship Research (2017) 7:28 wealth and entrepreneurship can be positively related without liquidity constraints
It is hypothesized that: H3: Proactive entrepreneurs are more likely to enter into manufacturing rather than service industry. This was a cross-sectional study conducted between October and December 2015 in Greater Accra Metropolitan Area (GAMA) in Ghana
Summary
Entrepreneurial choice as part of the entrepreneurship literature has gained significant attention since the work of Evans and Jovanovic (1989). Evans and Jovanovic (1989) focused on the idea of entrepreneurial choice under conditions of liquidity constraints. Even though wealthier people may not necessarily be entrepreneurs, poor people cannot start a business. This is mainly because adequate capital is one of the major requirements of starting any meaningful enterprise. Harada and Kijima (2005) have attempted to provide an explanation into the EJ Model by indicating that consumption of leisure influences entrepreneurial choice and Acheampong Journal of Global Entrepreneurship Research (2017) 7:28 wealth and entrepreneurship can be positively related without liquidity constraints. Some of the findings have included age (Lévesque and Minniti, 2006), location (Glaeser and Kerr 2009), income taxes (Fossen and Steiner 2008), gender (Fossen, 2012), income and job creation (Burke et al, 2000), education (Block et al, 2011) and credit constraints (Aghion et al, 2007)
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