Determinants of Entrepreneurial Failure in the DRC: Empirical Evidence

Abstract

This study aims to identify the determinants of agricultural business failures in the DRC, based on a survey of 361 entrepreneurs distributed across three provinces (Kinshasa, Kongo-Central, Kwango) and a binary logistic regression model, in order to better guide support policies and entrepreneurs' strategies. The results demonstrated that agricultural business failures are determined by several factors, such as the entrepreneur's profile (gender, education level, age, experience in the agricultural sector, motivation to start the business); farm characteristics (frequency of supervision, adherence to technical production guidelines); human and social capital (education level of the production manager and having close farmer relatives); economic capital and innovation (production costs and access to new agricultural technologies); institutional and social environment (ease of product evacuation, regulatory framework, institutional support, access to agricultural insurance, exposure to insecurity, difficulties in finding clients, and lack of electricity at the production site); information asymmetry, and culture (opportunistic behavior of agricultural workers and fraud by input suppliers). To enhance the viability and resilience of the agricultural sector in the DRC, effective agricultural policy, security in production areas, strengthening the technical capacities of farmers, adopting new agricultural technologies, and improving the business climate are imperative.

Classification JEL : Q12, G33, L26, O55, D22

Paper type: Empirical Research