The ripple effect of demographics on the entrepreneurial behaviour-performance relationship in the South African tech sector

Abstract

South Africa’s enduring inequality, stemming from the lingering effects of apartheid laws, disproportionately impacts entrepreneurs across various demographic dimensions, specifically race and age. This study adopts an intersectionality lens to examine how these demographic variables influence entrepreneur means, particularly the reliance on intangible resources, and consequently their impact on the entrepreneur behaviour - firm performance nexus within the South African tech sector. Despite some progress, this area of research remains relatively underexplored, necessitating this study to bridge the existing knowledge gap. Upholding the utmost confidentiality and anonymity of respondents, in accordance with the approved protocol (H21/10/34) sanctioned by the ethics committee at Wits Business School, the research meticulously explores how demographic variables influence entrepreneur means and the subsequent impact on firm performance. The main objectives of this study are as follows: 1. To investigate the relationship between effectual entrepreneur behaviour and firm performance among technology founders. 2. To examine the relationship between effectual entrepreneur behaviour and firm performance through entrepreneur means (intangible resources). 3. To examine the mediating effect of entrepreneur means in the relationship between effectual entrepreneur behaviour and firm performance, with a specific focus on how this mediating effect might be moderated by race and age. 4. To establish and validate a measurement model for entrepreneur means (intangible resources). iii In this quantitative study, a cohort of 159 technology firm founders in South Africa, each with a minimal operational tenure of three years, participated in this study through self-administered online structured questionnaires. To unravel the intricate relationships within the data, the analysis utilised Partial Least Squares Structural Equation Modeling (PLS-SEM) complemented by Statistical Package for Social Sciences (SPSS) alongside SPSS Amos. The findings shed light on the intricate interplay between effectual entrepreneur behaviour, entrepreneur means, and firm performance, supporting several hypotheses (H). First, a positive correlation was established between effectual entrepreneur behaviour and entrepreneur means, and firm performance, supporting several hypotheses (H). A significant positive association between effectual entrepreneur behaviour and firm performance validated H1, underscoring the critical role of intangible resources in driving firm performance. However, the study’s examination of the mediating effect of entrepreneur means on the relationship between effectual entrepreneur behaviour and firm performance yielded only partial support. While the mediation was observed to be positive, its strength was moderate, suggesting the presence of unexplored variables beyond the scope of this study, influencing firm performance and providing partial support for H2. Regarding H3, the combined influence of race and age did not directly affect reliance on entrepreneur means, but it significantly affected firm performance. Nonetheless, the interaction among race, age, and entrepreneur means demonstrated the potential for a negative influence on firm performance. Lastly, a positive correlation was established between effectual entrepreneur behaviour and entrepreneur means, affirming H4. iv In conclusion, while this study highlighted the crucial role of effectual entrepreneur behaviour and intangible resources for technology founders, it also suggests the presence of unexamined variables that may exert significant influence on firm performance within South Africa’s highly unequal landscape. Despite the influence of race and age on firm performance, their combined impact with entrepreneur means was not as pronounced as anticipated. Further research is warranted to identify and understand these additional factors, thus enriching our understanding of entrepreneur means, behaviour, and firm performance within South Africa’s unequal landscape.