Social capital and entrepreneurial performance of immigrant and South African entrepreneurs: a comparative study between immigrant and South African entrepreneurs in Kwa-Tsa-Duza

Abstract

The ability of immigrants to craft successful livelihoods in the harsh economic climate that seems to overwhelm the local population has led to them being blamed for the unfortunate plight of South Africa’s poor, with the result that there has been targeted violence on immigrants in recent years. Informal sector entrepreneurship is at the heart of this with immigrants said to be outperforming local entrepreneurs, and taking away the last option of earning an income. Entrepreneurship is quoted as the only lasting solution to the poverty and unemployment that plagues developing countries. The ability of immigrants to succeed in a sector that is considered unproductive is worth investigating. In this study, cross sectional data is used to compare the antecedents of Entrepreneurial Performance between foreign Immigrants and South Africans. The findings are that, while both group’s performance is affected by Entrepreneurial Action; South African performance is driven mainly by deprivation, a factor that has no effect on immigrants. This puts the recent explosive response of local entrepreneurs to immigrant competition into perspective, and necessitates interventions that will, not only curb further xenophobic violence, but up-skill local entrepreneurs and enable them to make a living out of informal sector entrepreneurship. Contrary to popular belief, none of the population’s performance was linked to Social Capital. There is no use allowing people into the country only to stifle their ability to sustain themselves. Immigrant Entrepreneurship is a reality that South Africa needs to embrace.