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.
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