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The African Entrepreneurial Ecosystem Index: Conceptual, Methodological and Empirical Flaws and the Way Forward

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  • Naudé, Wim

    (RWTH Aachen University)

Abstract

This paper identifies conceptual, methodological, and empirical flaws in the first African Entrepreneurial Ecosystem Index (AEEI) that was launched in 2024. These flaws limit the usefulness of the AEEI. Moreover, given that the both the notions of entrepreneurial ecosystems and composite indices are subject to subjectivity and are ad hoc, use of the AEEI can lead to simplistic policy conclusions; worse, a poorly constructed index can detract, mislead and be manipulated. It is concluded that if scholars are to embark on entrepreneurial ecosystem index building despite the concept lacking sound theoretical and empirical foundations, then it is best not to focus on the cross-country level, but to start at the sub-national level and follow best practice in composite index building. This will have the benefits of at least being more consistent with the ideas of entrepreneurship as being place dependent and that ecosystem measures should be concerned with what entrepreneurs want - and less on existing institutions.

Suggested Citation

  • Naudé, Wim, 2024. "The African Entrepreneurial Ecosystem Index: Conceptual, Methodological and Empirical Flaws and the Way Forward," IZA Discussion Papers 17075, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17075
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    References listed on IDEAS

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    More about this item

    Keywords

    entrepreneurship; Africa; entrepreneurial ecosystem; composite indices;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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