Journal of Management Studies· 2012Q1
Capital Is Not Enough: Innovation in Developing Economies
- 366citations
- Q1SCImago
- 2012year
Short summary
Innovation, not just capital, is key to poverty reduction via entrepreneurship in developing economies, with differentiation-based innovations proving more effective than novelty-based ones.
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Key points
- Poverty reduction through entrepreneurship requires innovation, not just capital.
- Innovation mediates the relationship between capital (financial, social, human) and firm performance.
- Differentiation-related innovations are more effective for firm performance than novelty-related innovations.
- Findings are based on a survey of 201 small business owners in a Nairobi microcredit program.
AI-generated from the title and abstract; the full text is not read.
Abstract
abstract Economic development and social entrepreneurship often conceive of poverty as a resource allocation problem in which a lack of capital prevents the poor from increasing their income through entrepreneurship. This allocative view, however, represents only one possible approach to conceptualizing entrepreneurial opportunity. The alternative discovery‐ and creativity‐based views place a greater emphasis on innovation which implies that superior ideas are also needed if poverty is to be reduced through firm performance. Drawing from a survey of 201 small business owners involved in a microcredit programme in Nairobi, Kenya, we find that the financial, social, human capital–performance relationships are mediated in part by innovation. Further, we find that differentiation‐related innovations lead to better firm performance than novelty‐related innovations.
The authors' abstract, as published at the source. Journal of Management Studies, 2012 · DOI ↗
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Field: Business and International Management
Business and International ManagementBusiness, Management and Accounting