- The Johns Hopkins University series on Entrepreneurship
Edited by Phillip H. Phan, Jill Kickul, Sophie Bacq and Mattias Nordqvist
Chapter 2: A social exchange theory of non-governmental organizations as social entrepreneurs in rural entrepreneurship
Those who study the development of societies have considered entrepreneurial capital accumulation as the engine that drives economic growth (Van Stel et al., 2005). Evidence from the Global Entrepreneurship Monitor (GEM) shows that growth in gross domestic product (GDP) and the employment rate of a country increase with more venture startups (Zacharakis et al., 1999). Entrepreneurs are important economic engines of any country's growth because they not only accelerate the generation, application, and spread of innovative ideas but also ensure the efficient use of resources and expand the boundaries of a country's economic activities (Reynolds et al., 1999). Interest in rural entrepreneurship in developed countries has increased in recent years because traditional economic activity in manufacturing has struggled to remain competitive in the face of increased global competition (Marke and Markley, 2006). In rural areas hardest hit by economic stagnation, entrepreneurship is a solution to reignite economic development (Ozgen and Minsky, 2007). Policymakers thus look to rural entrepreneurship as a solution to difficulties encountered in regional wealth creation. In developing countries, economic development has traditionally been a top-down process in which aid money filters through a bureaucratic chain before reaching its beneficiaries. Without the inclusion of training and capacity building, such passive beneficiaries often become dependent on continuing government programs to fund consumption (Maxwell, 2003).
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