Factors Affecting Socioeconomic Performance of Informal Micro and Small Enterprises in Senegal

Abstract

This study aimed to empirically examine the mediating effect of competitive advantages between entrepreneurial competencies and socioeconomic performance as well as the direct effect of entrepreneurial competencies and access to financial, social and human capitals on the socioeconomic performance of informal micro and small enterprises (MSEs) in Senegal through the lens of a resource-based view (RBV) theory. Utilizing a cross-sectional design, data for the study were randomly gathered from 356 micro and small entrepreneurs operating in the informal sector. The outcomes of the study indicated that opportunity-recognition competency, relationship competency, commitment competency, financial capital and competitive advantages all have a significant and positive impact towards the socioeconomic performance of Senegal’s informal economy. On the contrary, organizing competency, conceptual competency and social capital displayed a positive but insignificant effect on the socioeconomic performance, whereas strategy competency and human capital have both a negative and insignificant effect on the socioeconomic performance of Senegal’s informal economic sector. The results highlight the importance of entrepreneurial competencies and access to capital towards improving the socioeconomic performance of informal MSEs across developing countries. The paper ended by presenting the discussion and implication of the study.