Job Loss in the Pandemic Disruption in Egypt: A Push to Start a Business?

Abstract

AbstractThe Coronavirus caused severe losses, many owner-managers lost their businesses, and many employees lost their jobs. This raises the question of whether such losses were a push into traumatic resignation or a push to start a business? And what are the main factors that influence responses? This chapter aims to answer these questions by drawing on the Theory of Planned Behaviour in order to help advance the scarce literature on entrepreneurial intentions under adverse conditions. We build and test a model of entrepreneurial intention highlighting entrepreneurial mindset (self-efficacy and opportunity perception) and social capital as core determinants of entrepreneurial intention. Using a sample of 1777 owner-managers and employees in Egypt surveyed by the Global Entrepreneurship Monitor (GEM), results of logistic regression reveal that former owner-managers, who had just lost their business, were less entrepreneurially minded and networked less than their continuing counterparts. Former employees, who had just lost their job, were no more entrepreneurially minded than their continuing counterparts. Results also show that self-efficacy and opportunity perception play a key role in promoting people’s entrepreneurial intention. The findings contribute to the debate on predictors of entrepreneurial intention in hostile environments and developing countries; and pave the way for studies on whether disadvantages such as the COVID-19 pandemic prompt a new type of entrepreneurship where necessity aligns with opportunity.KeywordsCOVID-19Disadvantaged workersBusiness lossJob lossEntrepreneurial mindsetSocial capitalEntrepreneurial intentionEgypt