Distinguishing economically from legally formal firms: Targeting business support to entrepreneurs in South Africa's townships


Journal Article

Although the government of South Africa (SA) has formally adopted a policy of proactive support of entrepreneurship, providing business assistance to all of its entrepreneurs is beyond SA's financial and human resource capabilities. This study utilizes the results of an in-depth survey of entrepreneurs in SA's townships to find: (1) The business and owner traits that predict revenues and job creation among the township entrepreneurs, (2) The key issues that challenge township entrepreneurs; and (3) What the answers to these issues imply about the appropriate content and recipients of business assistance to township entrepreneurs. A distinction is helpful in framing this study's approach. In SA, registered (licensed) businesses are legally formal firms. In contrast, economically formal firms have institutionalized processes that lead to success as a profit-making firm. We use this distinction in our analysis of the data and framing of the implications for business assistance strategy in SA. © 2007, International Council for Small Business.

Full Text

Duke Authors

Cited Authors

  • Bradford, WD

Published Date

  • January 1, 2007

Published In

Volume / Issue

  • 45 / 1

Start / End Page

  • 94 - 115

Electronic International Standard Serial Number (EISSN)

  • 1540-627X

International Standard Serial Number (ISSN)

  • 0047-2778

Digital Object Identifier (DOI)

  • 10.1111/j.1540-627X.2007.00201.x

Citation Source

  • Scopus