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ENTREPRENEURIAL TRAINING AND BUSINESS DISCONTINUATION: A CROSS COUNTRY STUDY

Abstract

This study analysed the impact that entrepreneurial education training and evolution in the external environment of the firm, as manifested in external macroeconomic factors such as interest rate, economic growth rate, and per capita income, have on the rate of business discontinuation/failure among start-up firms across 43 developing countries. Using human capital and organizational ecology theory as the lens through which to view the problem, the paper developed a conceptual model to capture the relationship between the human capital resources of the firm and evolution in the external environment and business discontinuation/failure. This framework was tested using a semi-log linear regression model. The results revealed that it is evolution in the environment, as manifested by changes in per capita income that has the most significant impact on the level of business discontinuation/failure and not human capital resources of the entrepreneur. The policy implications from these results are clear. Policymakers will have to grow their economies in order to improve the level of disposable income if they are to ensure better transition of businesses from start-up to established operations.

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