Entrepreneurial Activity, Social and Human Capital for Urban Poverty Reduction in Accra

Abstract

Poverty reduction has become a paramount concern in the international development arena because of the large number of people affected by it globally. The study investigates how the entrepreneurial activities of petty traders with respect to their social and human capital can contribute to the reduction of poverty. Using a cross-sectional survey data, the study built a social capital index, estimated the income level and employed a probit regression model in finding out the effects of social and human capital and other factors on the probability of a petty trader being poor. The study also used mean score analysis, t-test and Pearson correlation to investigate the entrepreneurial action related activities of petty traders that relate to the performance of their enterprise. Furthermore, the qualitative descriptive concept of critical moment was utilized to gauge critical events that enabled successful petty traders to escape from poverty. In comparing the factors that facilitate the performance of male and female petty traders, the study built a network index, assets index and employed a logistic regression to identity network intensity and other factors that differentiate the performance of male and female petty traders. The results showed that social capital plays a crucial role in the reduction of poverty of petty traders. Related to this, factors such as experiential knowledge, size of the household, age of the petty trader, an itinerant hawker/a shop owner also have significant effect on the probability of a micro entrepreneur being poor. Furthermore, motivation and entrepreneurial orientation are important human actions performed by growth-oriented petty traders. Additionally, human agency, social structures and processes are equally important factors in the performance of micro businesses. Network intensity and non-economic measure of performance have shown that female petty traders can equally match their male counterparts. However, the asset index showed a clear difference between female and male petty traders. The study recommends that policy must be directed towards nurturing the relevant entrepreneurial skills of the poor urban petty traders. This will enable traders to take advantage of globalization, which has made consumer items available in the urban space. Besides, policy should also be directed at formalization of informal trading activities should be tied with credit provision where street vending should not be seen as a nuisance. Finally, it is imperative to reorient the mindset of female traders to take on the sale of other consumer items, which seem to be the sole preserve of men because that is where there are significant profits to be made.