Roots of Mistrust: The Legacy of the Slave Trade on Social Entrepreneurship in Africa

Abstract

The community interest is often at the center of social entrepreneurial action. Yet, few social enterprises invoke the community development approach in attending to social problems. Why do some social enterprises focus on community development, while others do not? Tensions related to the nature of ownership, leadership, and operating environment offer some insight. Yet, few studies consider the influence of historical context of the operating environment, in particular how age-long trauma can define patterns of modern entrepreneurial activity. We hypothesize that exposure to significant historical shocks might tend to fracture social cohesion and trust in societies, and thus will reduce the likelihood of community development enterprises. Leveraging the empirical background of the historic African slave trade that occurred between 1400 and 1900 AD, which resulted in the forced migration of indigenous Africans, we analyze the historical impact of slavery on the pattern of social enterprise in Africa. Our findings highlight how the impact of this historical shock is contingent on family and female embeddedness in the new venture. Given the importance of social enterprises in efforts to develop communities in least developed regions around the world, our research reveals the roots of inhibiting forces in modern societies and identify important caveats in these relationships. We conclude by parsing out implications for research, entrepreneurs, and policy makers.