Microenterprise, Multinational Business Support, and Poverty Alleviation in South Africa's Informal Economy

Abstract

The authors examine corporate programs that support microenterprise development in Africa. Specifically, the analysis assesses the extent to which local income and sales are affected by Coca-Cola's initiatives to assist South Africa's microenterprise in the retail trade sector. To quantify the impact, questionnaires were obtained from owners of small-scale retail establishments in the country's vast informal economy. Regression analysis is performed on key variables from the survey, testing hypotheses advanced to explain the size of an owner's income and sales. In addition to business development support, the explanatory variables include startup capital, size, and male/female ownership. It appears that business development support has a positive effect on lifting income and reducing poverty for microenterprise owners, after controlling for other influences.

Key words:

• BOP
• CSR
• informal economy
• microenterprise
• MNCs
• South Africa

Notes

Note. Total Sales (monthly), Owner's Income (monthly), and Startup Capital are expressed in South African rand.

Note. Total Sales (monthly), Owner's Income (monthly), and Startup Capital are expressed in South African rand.

*p < .10, **p < .05, ***p < .01.

Note. Total Sales (monthly), Owner's Income (monthly), and Startup Capital are expressed in South African rand.

*p < .10, **p < .05, ***p < .01.

Note. Standard errors are in parentheses.

*p < .10, **p < .05, ***p < .01.