AN ANALYSIS OF PRODUCTIVE AND DESTRUCTIVE ENTREPRENEURSHIP: A SURVEY OF LITERATURE

Abubakar S. Garba & Ahmad Muhammad Tsauni

 
Department of Business Administration, Northwest University, Kano

Department of Economics, Bayero University, Kano

Email: ahmadutsauni@gmail.com; atsauni.eco@buk.edu.ng

Abstract: Entrepreneurship is overwhelmingly accepted by policy makers in both developed and developing countries as a veritable tool for job creation and growth. It is on this premise that entrepreneurs are supported and encouraged particularly in countries with poverty incidence, high unemployment and low growth. Although, entrepreneurial practice cuts across all countries, the nature, outputs and impact of the entrepreneurial activities vary. The determination of what type of entrepreneurship to be encouraged is very crucial in policy making as entrepreneurship could be productive or destructive. The paper explores relevant literature on entrepreneurship to analyse the behaviour and effects of its productive and destructive components on the growth of developing economies. Through synthesis of the literature, the paper compares the benefits or otherwise of productive and destructive entrepreneurial activities and examines the role of formal and informal institutions toward those activities. Therefore, the ability of any country to achieve and sustain growth is dependent on whether the benefits brought about by productive entrepreneurial activities outweigh the negative effects of non-productive entrepreneurial activities. However, in most developing economies where corrupt practices are prevalent, cost of doing business is increasing and institutions are weakened, destructive entrepreneurship is accentuated. Thus, destructive entrepreneurship is often attributable to developing economies. Rule of law is overly needed to impose necessary restrictions for destructive entrepreneurship a long side with improving infrastructure and reducing cost of doing business.