Exploring kin and family support to young firms in Ethiopia

Abstract

Purpose

This study aims to compare the outcome of support extended by the family and kin for new firms. The authors specially consider business performance, challenges, demography and personality traits of entrepreneurs.

Design/methodology/approach

A structured questionnaire was used to collect responses on the socio-demography aspects of the entrepreneur, family, kin, business performance, personality traits and perceived challenges were collected from 350 young entrepreneurs of South Wollo province of Ethiopia. The ANOVA test for continuous variables and the Krukal–Walis test for nominal variables were conducted to find differences across eight groups with family and kin, their occupation (business/non-business) and extended support (yes/no).

Findings

Only 40% of entrepreneurs reported support, non-business families support entrepreneurial effort more compared to business families. Support is associated with perceived business performance and sociocultural challenges, but not with revenue. Entrepreneurs with less age, education and prior experience received more support compared to others. Entrepreneurs with higher need-for-achievement traits reported less support. Interestingly, entrepreneurs from business backgrounds are likely to perform better, with or without support.

Research limitations/implications

The extension of support to entrepreneurship depends on socioeconomic, demography, or personality-related factors and their interactions. The study did not investigate support from peers, an extended network, or the nature of support.

Social implications

Family and kin support influences entrepreneurial persistence, overcoming the sociocultural challenges and arresting quit intention among entrepreneurs at the initial stages of a venture.

Originality/value

The influence of immediate family or a network represents extremes, overlooking the role of kin. This study fills this gap and extends understanding of the role of kin in the context of Ethiopian young entrepreneurs.

Citation

Kar, B. and Ahmed, Y.A. (2022), "Exploring kin and family support to young firms in Ethiopia", African Journal of Economic and Management Studies, Vol. 13 No. 3, pp. 385-401. https://doi.org/10.1108/AJEMS-05-2021-0199