Influence of Demographic Factors on Business Performance in Ethiopia

Abstract

Ethiopia, as a developing country has a higher level of youth unemployment combined with a higher level of growth in the economy, in the recent past. In Ethiopia, the youth entrepreneurship has been regarded as a tool for employment creation. However, the country is faced with the challenge of high youth unemployment rates. Still, the country is one of the lowest rates of youth entrepreneurial activity and business survival in the sub-Saharan African region. This research is supposed to fill the gaps by investigating the major effect of demographic variables with youth owned business performance. Further, the research employed both a descriptive survey and exploratory research design with a sample size of 350 youth entrepreneurs. The results obtained from a multiple regression model indicate that age, educational level and prior work experience of the youth entrepreneur were found to be positive and significantly important in explaining the perceived business performance. The implications of this study are that specific policy measures are necessary to encourage the many well trained but unemployed young people to engage in businesses. Additionally it also implies that specific training programmes are necessary to equip the practitioners with necessary theoretical and practical capacities to enhance performance of their firms.