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Broaden the Pathway to Inclusive Entrepreneurship: A Transaction Cost Proposition

  • Jian Du ORCID logo , Jie Lu ORCID logo EMAIL logo and Yanbing Jiang
Published/Copyright: July 5, 2021

Abstract

Since entrepreneurship was conceptualised as a panacea for achieving inclusive growth in the “base of the pyramid” (BoP) regions, various ways have been explored to leverage this powerful tool, such as helping potential entrepreneurs build the resource base and capabilities. However, given the severe resources constraints in the BoP regions, such a goal is difficult to achieve. Besides, due to the high demands on personal competence, only a few people can benefit from this method, which fails to solve the problem of social exclusion in the BoP regions. Therefore, we aim to find a better way to leverage entrepreneurship to tackle the problem of the BoP regions by calling for more attention to the inclusiveness of entrepreneurship. Based on data of inclusive entrepreneurs in Zhejiang, China, we construct a three-stage model for inclusive entrepreneurship. We also apply Transaction Cost Economics to look for determinants that foster inclusive entrepreneurship and validate our main assertion that decreasing transaction cost significantly helps to increase the inclusiveness of entrepreneurship, and different phases of inclusive entrepreneurship (i.e., opportunity inclusiveness, participation inclusiveness, and sharing inclusiveness) are influenced by different sets of determinants of transaction costs.


Corresponding author: Jie Lu, School of Management, Zhejiang University, Hangzhou, Zhejiang, China, E-mail:

Funding source: Zhejiang Provincial Soft Science Research Program

Award Identifier / Grant number: 2020C25039

Funding source: National Natural Science Foundation of China

Award Identifier / Grant number: 71832013

Award Identifier / Grant number: 71672176

Award Identifier / Grant number: 72072160

  1. Research funding: This research was funded by Zhejiang Provincial Soft Science Research Program (grant no. 2020C25039) and National Natural Science Foundation of China (grant no. 71832013, 71672176, and 72072160).

Appendix

Table A1:

Summary of the interviewees.

Region Interviewed organizations
Hangzhou 6 firms; 1 government agency
Taizhou 9 firms; 2 government agencies; 1 industry association
Yiwu 6 firms; 1 industry association
Quzhou 8 firms; 4 government agencies;1 industry association

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Received: 2020-03-01
Accepted: 2021-04-26
Published Online: 2021-07-05

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