TOWARDS A MORE COMPREHENSIVE CAPITAL-BASED FRAMEWORK FOR EXPLAINING PERFORMANCE OF SMALL-SCALE ENTREPRENEURS: Illustrations From the Ghanaian Marketplace

Traditionally, several studies have used financial capital, human capital, and social capital constructs to explain the success of entrepreneurs who operate small-scale enterprises in emerging economies. Entrepreneurial market-traders in Ghana, West Africa, operate within political and economic institutions which have created turbulent environments with few financial safety nets. These market traders also work in highly adverse physical conditions (e.g., fires, floods, hot weather, and unhygienic conditions). When market traders operate in such “double-void” contexts, we argue that financial, human, and social capital are not enough for them to succeed. Such traders need to be highly innovative and have creative decision-making skills. They also need a high level of optimism, determination, and resilience. Consequently, the more currently referenced capital sources (cognitive capital, psychological capital) are particularly relevant in predicting the performance of their enterprises. We use published studies and extensive information about the marketplace in Ghana to develop vignettes that highlight the need for cognitive and psychological capital. We examine the implications of emphasizing cognitive and psychological capital for theory, research, and practice associated with small scale enterprises, particularly those situated in emerging economies.