Theoretical Models of the Impact of Small Business and Entrepreneurship on Poverty
Keywords:
Entrepreneurship, small business, poverty reduction, development theory, inclusive growthAbstract
This thesis explores theoretical models that explain how small businesses and entrepreneurship contribute to poverty reduction. It analyzes the neoclassical, endogenous growth, Schumpeterian innovation, livelihood, and institutional theories, each highlighting different pathways to economic empowerment. The study shows that entrepreneurship generates employment, promotes innovation, builds resilience, and fosters inclusive growth, particularly in developing contexts. Special attention is given to gender dynamics, informal economies, and institutional support structures. The research emphasizes that poverty alleviation through entrepreneurship requires an enabling environment and context-specific interventions informed by a blend of these theoretical perspectives.
References
Schumpeter, J. A. (2021). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Harvard University Press.
Romer, P. M. (2020). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102. https://doi.org/10.1086/261725
Ellis, F. (2020). Rural livelihoods and diversity in developing countries. Oxford University Press.
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
Naudé, W. (2010). Entrepreneurship, developing countries, and development economics: New approaches and insights. Small Business Economics, 34(1), 1–12. https://doi.org/10.1007/s11187-009-9198-2
