Determinants of Entrepreneurial Behaviour in FATA Pakistan

Strategy Support (PSSP) an initiative to strengthen evidence-based policymaking in Pakistan in the areas of rural and agricultural development. Funded by the Development (USAID) and implemented by the Food Policy Research Institute (IFPRI), the PSSP provides analysis in four areas: agricultural production and productivity; water management and irrigation; macroeconomics, markets and trade; and poverty reduction and safety nets. The PSSP is undertaken with guidance from the Government of Pakistan through the federal Planning Commission and a National Advisory Committee, and in collaboration with Innovative Development Strategies (Pvt) Ltd. (IDS), Islamabad, and other development partners. For more information, visit pssp.ifpri. info. ABSTRACT This research investigates determinants of entrepreneurial behaviour in one of the most impoverished areas of Pakistan, the Federally Administered Tribal Areas (FATA). Unlike the developed world, the scenario in emerging economies is quite different, where entrepreneurs have to rely primarily on socio-cultural factors that facilitate them to pursue entrepreneurship as a means to earn livelihoods. However, little predictive empirical work has investigated enterprising behaviour in the tribal areas of Pakistan. This study examines the relative strength of selected entrepreneurial determinant in the Pashtun tribal culture. Persistent wars, economic downturn, and strong cultural adherence have turned the Pashtun tribesmen into necessity entrepreneurs. Based on primary data from 462 respondents, entrepreneurial behaviour measured by self-reported views toward risk-taking and innovativeness are related to economic, institutional, and cultural constructs using logistic regression models. Different sets of predictors emerged for risk-taking and innovativeness. We find some, but limited support for hypothesized determinants of entrepreneurial behavior. This study informs academics as to how entrepreneurial behaviour of Pashtuns can be enhanced, setting up hypotheses and results for future research exploration, and can guide policy to stimulate underlying factors that will promote entrepreneurship in FATA. This study examines the intricacies involved in individuals’ entrepreneurial behaviour and its underlying psychographic and broader determinants. Through surveys conducted with 462 small-scale entrepreneurs in FATA by survey teams from the seven agencies, demographic characteristics were collected, along with self-assessments of the attitudes of the respondents toward risk-taking and innovativeness and their perception of the potential economic, institutional, and cultural determinants of their entrepreneurial behavior. These descriptive responses are of interest in their own right. In addition, risk-taking and innovativeness self-perceptions are regressed against the views regarding behavioural determinants reflecting economic circumstances (economic conditions and provision of security and sup-port), institutions (business financing, level of administrative burdens, and protection of legal rights), and culture (individualism, power distance, masculinity, and religious orientation). The objective is to assess factors that facilitate a long-term indigenous solution to invigorate entrepreneurial behaviour and could contribute to a sustainable economy, peace, and tranquility in FATA Pakistan. The study rests on the notion that socio-economic policies imposed without examining entrepreneurial behaviour will not reap lasting results. It fills a gap in previous empirical and evidence-based research for a region where policies have largely devised based on unjustified prose travelers, historians, and journalists 2011). The study of determining factors brings to the fore an theory of entrepreneurial It is expected entrepreneurial extremism the run and could become a for lasting face competition (Q10). These scores show the second most agreement among all questions asked. The responses reflect a continuous economic struggle of Pashtun tribesmen living in rigid mountainous areas adjoining the Afghan border. This finding is understandable on the basis of common observations about Pashtun people as a whole. When asked about whether they live a happy life and fulfill all their desires, responses were mixed at best, and the average scores were closer to neither agree nor disagree.