Visiting the contribution of high-growth entrepreneurial firms (HGEFS) to new employment: the case of Ethiopia

Thesis defended on the 14th of march 2019 at 2:30pm, at l’ÉCOLE DES MINES DE PARIS  (60 boulevard Saint-Michel 75006 Paris) Room L109 (Le Chatelier)

Abstract:

High-growth firms account for a disproportionate share of new job creation in most economies. This has led to the emergence of a diverse agenda that examines these firms to determine their characteristics and the engine behind their superior growth rate. In particular, there is abundant literature that focuses on developed countries with a large portion of the research tilted towards prescribing growth enabling public policy changes. In the context of developing countries, little or no attention was given to high-growth firms. Hence, it is the purpose of this research to investigate high-growth firms in the Ethiopian market setting which has registered unprecedented economic growth rate for the past 10 years. In doing so the different chapters of this research are devoted to transforming the definition of a high-growth firm by giving the necessary attention to the growth engendering phenomenon from an entrepreneurial dimension, centering the role of the entrepreneur and entrepreneurship as the catalyst of growth. As such, the research formulates a HGEF definition aided by a theoretical framework that exhibits the growth strategy and process of firms with the aim of emphasizing the role of the entrepreneur and entrepreneurship in inducing a superior growth rate. The research takes a particular focus on to what extent business environment obstacles may hamper HGEFs in Ethiopia by studying the impacts of infrastructure, public utilities, capacity, administrative burden and procedures, finance, and corruption to HGEFs operation together with a search for their incidence level.

To test the contribution of Ethiopia’s HGEF to new job creation, both quantitative and qualitative methods are applied under “Convergent Parallel Mixed Methods Design” research format. The first phase of the investigation will utilize the World Bank data of 848 Ethiopian firms to measure incidence level and business environment impact analysis. In the second phase, the result of the field work that captured data through interviews of 9 HGEFs to verify and test preliminary findings will be used to add new insight to the issue. The findings of the research convey counterintuitive outcomes that shows that HGEF potential for development through new job creation resides in traditional sectors of the economy with minimal presence in sectors that necessitates high capital and technical investment. Moreover, the level of adaptability and compatibility of HGEFs with corruption level in the business environment provides a result that contradicts the commonly held academic position that argue the intrusive nature of corruption and its impact on firm growth rate. Finally, in conjunction with the developmental centric academic perspective the research concludes by emphasizing the need to incorporate the idiosyncratic representation of entrepreneur and entrepreneurship in public policy design to favor growth and to tailor support according to the life cycle of firms.

Keywords: Entrepreneurship, High-Growth Firms, Firm Growth, Developing Economies

Jury: