MICROENTERPRISE GROWTH AT THE BASE OF THE PYRAMID: A RESOURCE-BASED PERSPECTIVE

In a base-of-the-pyramid context, the ability to start ventures is often quite robust because micro-entrepreneurs are able to start with few resources and can often sustain ventures for extended lengths of time in the absence of meaningful revenues. Yet, the ability to grow ventures tends to be much more problematic. This paper examines the role of resources in yielding competitive advantage for microenterprises in base-of-the-pyramid markets, arguing that the value of resources is a function of their ability to supplement formal institutional voids. We consider access to formal infrastructure, assets that provide stability and business skills as potential sources of competitive advantage. We also examine the effect of resource allocation tactics on microenterprise growth. We test our theory using a sample of South African microenterprise owners. Implications are drawn for ongoing theory development and practice.