The relevance of entrepreneurial self-efficacy, social networking, and the institutional environment on immigrant entrepreneurship in South Africa

Abstract

South Africa has high rates of criminal activity and widespread corruption, which debilitates entrepreneurial activity, performance, and operations for many entrepreneurs. One of the causes of these issues is the restrictive nature of the regulatory environment. However, many immigrants are able to overcome these challenges, using their entrepreneurial self-efficacy and social networking capabilities. Entrepreneurial self-efficacy has been found to influence entrepreneurial intention, behaviour, motivation, and performance; furthermore, entrepreneurial self-efficacy is the targeted outcome of entrepreneurial education and training. Social capital is an advantage to immigrant entrepreneurs in the acquisition of capital resources, and their networks provide access to further opportunities. This study aimed to determine if an ethnic immigrant minority, Pakistani immigrant entrepreneurs, is able to operationalise their entrepreneurial self- efficacy and social networks to improve the performance of their ventures, despite all the regulatory challenges that they face in South Africa. This study employed a quantitative research method, using quantifiable variables to measure relationships. Immigrant entrepreneurs have capabilities, experience, and knowledge, all of which are useful, according to the resource-based theory, for conducting business internationally. These were measured in terms of entrepreneurial performance with a specific focus on growth and innovation. The results showed that the self-confidence of Pakistani immigrant entrepreneurs had a significant influence on their growth and innovation, whereas their social networks had a negative impact on their entrepreneurial performance. Furthermore, contrary to Western studies, which suggested that regulatory environments had an impact on business growth, it was found that South Africa's negative regulatory environment had no effect on the performance of Pakistani immigrant entrepreneurs.