The Evolution of Urban Entrepreneurship in Zambia

Abstract

Zambia is a former British colony. It gained independence in 1964 and now ranks as one of the middle lower income countries even though it has dropped from a higher ranking at independence. This history has had a bearing on entrepreneurship development in the country. This chapter discusses urban entrepreneurship in Sub-Saharan Africa (SSA), in general, and Zambia in particular. The chapter further elaborates the social-political factors that have shaped the entrepreneurial landscape of Zambia, and the status quo of entrepreneurial activities in four main urban and large cities in the country. The last section provides an empirical showcase of factors influencing the location decision of entrepreneurs in one of the urban cities, Kitwe. The lessons learned from this chapter are: first, historical events in the urban, institutional environment shape entrepreneurial activities of the present day; second, the four main urban areas in Zambia have developed distinctive types of entrepreneurial activities; and third, besides institutional factors, entrepreneurs make deliberate, personal choices for establishing firms in certain urban locations, primarily driven by the attitude towards avoiding tax, perceived levels of institutional corruption, size of the informal business activities and the overall satisfaction and comfort of the entrepreneur in having the business in the residential areas where they reside.

Appendix

Variables	(β)	R Ratio	Sign stability	Sign rate	Positive	Positive and significant	Negative	Negative and significant	N	Overall
Adequate space within the residence (H1)	−0.023	0.067	55	0	45	0	55	0	617	Not Robust
Mixed land use at residence (H1)	0.038*	1.526	100	49	100	49	0	0	617	Not Robust
Security of business (H1)	0.016	0.890	89	26	89	26	11	0	617	Not Robust
Size of informal activity (H1)	0.284***	6.649	100	100	100	100	0	0	617	Robust
Tax avoidance (H2)	0.189***	5.441	100	100	100	100	0	0	617	Robust
Lack of awareness (H3)	0.027	1.884	100	73	100	73	0	0	617	Not Robust
Institutional corruption at planning authority (H3)	0.046**	2.310	100	94	100	94	0	0	617	Robust
Proximity to family and residence (H4)	0.009	1.096	100	50	100	50	0	0	617	Not Robust
Satisfaction and comfort of the entrepreneur with location (H4)	0.097***	3.208	100	100	100	100	0	0	617	Robust

1. ***p < 0.01, **p < 0.05, *p < 0.1
2. These results are based on the Young and Holsteen (2017) methodology. The results are a summary of modeling distribution of all the variables in our regression model. The analysis is based on 265 unique combinations of the nine core variables
3. (β) = average β coefficient across all 256 estimations, R Ratio = robustness ratio. If higher than 2, it suggests robustness (Young and Holsteen 2017); Positive is the percent of models in which the variable enters with a positive sign; Positive and significant is the percent of models in which the variable enters with a positive and significant sign; Negative is the percent of models in which the variable enters with a negative sign; Negative and significant is the percent of models in which the variable enters with a negative and significant sign; Sign stability indicates the percentage of models that have the same sign; Sig rate is the significance rate indicating the percentage of models that report statistically significant coefficient. A significance rate of 95% or higher indicates strong robustness while a significance rate of 50% sets a lower bound for weak robustness; N = number of observations