The impact of social capital on entrepreneurship among smallholder farmers in rural South Africa

SOURCE: Journal of Rural Development
OUTPUT TYPE: Journal Article
PUBLICATION YEAR: 2018
TITLE AUTHOR(S): S.Sinyolo, M.Mudhara
KEYWORDS: ENTREPRENEURS, FARMERS, RURAL COMMUNITIES, SOCIAL CAPITAL
Print: HSRC Library: shelf number 10636
HANDLE: 20.500.11910/12972
URI: http://hdl.handle.net/20.500.11910/12972

If you would like to obtain a copy of this Research Output, please contact Hanlie Baudin at researchoutputs@hsrc.ac.za.

Abstract

This paper investigates the effect of social capital on entrepreneurship among smallholder farmers in rural South Africa. Farmers gain access to social capital through memberships in both agricultural and non-agricultural groups. A total of 513 households were randomly selected in three districts and the data were analysed using the zero inflated Poisson and instrumental variable probit models. The estimated results indicated that access to social capital was influenced by factors such as age, education, asset values, attitudes towards groups, market access, irrigation, training and distance to the nearest extension office. The results also indicated that access to social capital had a positive effect on entrepreneurship. An additional group membership was associated with an increase of 11 per cent on the chances of being an entrepreneur. The study findings suggest that promoting memberships in local associations or clubs can play a positive role in stimulating entrepreneurship among smallholder farmers in the rural areas of South Africa.