The Contribution of Islam to Entrepreneurial Activity in Cameroon

The Contribution of Islam to Entrepreneurial Activity in Cameroon

Joel Stephan Tagne (University of Dschang, Cameroon), Georges Kobou (University of Yaounde II, Cameroon) and Paul Ningaye (University of Dschang, Cameroon)
DOI: 10.4018/978-1-7998-1802-1.ch004

Abstract

The purpose of this study was to examine the effects of Islam on entrepreneurial initiative in Cameroon. In order to achieve this objective, the authors used data collected from 504 individuals in Douala and Yaoundé cities by the Laboratory for Research in Fundamental and Applied Economics (LAREFA) of the University of Dschang. Using the binary probit model and the bivariate probit model, the following results were obtained: 1) although not significant, the probability for a Muslim to start his own business decreases by 0.8% as compared to individuals of other religious denominations; 2) although not also significant, for an entrepreneur (or manager) to be a Muslim increases by about 8% his probability to become a well-established entrepreneur (or manager).
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Introduction

A country's economic growth is strongly linked to its entrepreneurial performance. However, entrepreneurship positively influences economic growth through the reduction of unemployment and the increase of creativity and productivity (Hamdan et al., 2018). Many researchers commonly associate entrepreneurship with business creation (Gartner, 1989; 1990). On the other hand, others associate it with entrepreneurship (Lecointre, 1993). As a result, there is no single definition of entrepreneurship in the scientific community. Without presenting all the definitions put forward so far, we have chosen Autio's (2005) definition, who presents entrepreneurship as the ability to create and set up businesses where others have not seen the opportunity to do so.

In Cameroon, entrepreneurship has undergone some evolution. Cameroon has moved from an entrepreneur state to a state that encourages the development of entrepreneurial activity (Global Entrepreneurship Monitor, 2014). In this regard, the Cameroonian government has implemented several measures in recent years to promote entrepreneurial initiative. These measures include the complete simplification of administrative procedures for setting up a business, the declaring and paying taxes, and the creation of an agricultural bank and an SMEs bank. These efforts have certainly contributed to the development of entrepreneurship in Cameroon. In several Doing Business reports published by the World Bank, Cameroon has made significant progress in improving the business climate. However, if in 2016 Cameroon was ranked 172 in the world, it gained a few points in 2017 and 2018 to occupy the 166 and 163 places respectively. Similarly, according to the Global Entrepreneurship Monitor (GEM) data for Cameroon, for the year 2016, the rate of entrepreneurial activity was 27.56%, the rate of established entrepreneurs was 15.20% and the rate of stoppage was 17.70%. According to these statistics, we can agree with Messeghem and Torrès (2015) that efforts are being made to know, understand and guide the development of entrepreneurship in Cameroon, but these efforts are still insufficient. Cameroon remains a giant in emerging entrepreneurship but a dwarf in the development of an ambitious entrepreneurship.

However, it is still interesting to understand what determines entrepreneurship and its different phases. While Baumol (1993) uses economic factors to explain the tendency of individuals towards entrepreneurial activity, Zahra et al (2008) uses institutional factors. It was also mentioned that religion could play an important role in entrepreneurial activity.

The idea that religion influences entrepreneurship has been approached in two ways. The first approach is that of Smith (1776) who considers religious leaders as entrepreneurs similar to lay entrepreneurs. Following this approach, lay entrepreneurs are motivated by interest, the same as religious entrepreneurs. The second approach is Weber's (1905), who considers religion as an explanatory factor of ordinary entrepreneurial activity (Seabright, 2016). Depending on this second approach, religious beliefs and values are believed to contribute to the way ordinary entrepreneurs conduct their business, without necessarily being religious entrepreneurs. According to the World Christian Database, 22.25% of Cameroonians are animists, 56.61% Christians and 20.04% Muslims. It is therefore certain that, according to this second approach, each religion spreads cultural values that shape the attitudes of individuals with respect to entrepreneurship in Cameroon.

Key Terms in this Chapter

Religion: An institution that governs human relations with superhumans. It is also presented as a set of beliefs and practices that connect human beings to the ultimate conditions of their existence.

Dschang: A historical and University City of Cameroon located in the Western region.

Entrepreneurship: The ability to create and build businesses where others have not seen the opportunity to do so.

Established Entrepreneur: An individual whose business is at least 42 months old.

Company: An economic and social structure that brings together human, material, intangible (service) and financial resources, which are combined in an organized way to provide goods or services to customers.

Islamic Precepts: A set of rules and laws that conform to the Islamic religion to which every adept must conform.

Islam: A religion whose origins go back to the Prophet Mohamed and which is described in the Koran as a submission to God's will.

Nascent Entrepreneur: An individual whose business is less than 42 months old.

Cameroon: A country in sub-Saharan Africa, more precisely in Central Africa bordered by Congo, Chad, Gabon, Equatorial Guinea, Central African Republic, and Nigeria, with French and English as official languages.

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