An Econometric Assessment of Entrepreneurship in the Diamond Mining Sector and Its Impact on Economic Growth in Sierra Leone

Abstract

This study examines the relationship between entrepreneurship in the diamond mining sector and economic growth in Sierra Leone for the period 1970-2013. The neoclassical production function is employed to explore new firm formation in the mining sector as a separate determinant of economic growth. Using recent econometric technique, the study finds a unique co-integrating relationship among real GDP, entrepreneurship, labour and capital. The results suggest that entrepreneurship exerts a positive and statistically significant effect on economic growth, and investment in the diamond mining sector is an important channel through which entrepreneurs fuel economic growth. Policy recommendation calls for entrepreneurship education, improving on the general labour capacity, facilitating access to finance, improving support services and the employment conditions for entrepreneurship.

Keywords: Entrepreneurship, diamond sector, economic growth, co-integration, Sierra Leone

DOI: 10.7176/RHSS/9-7-05

Publication date: April 30^th 2019