Entrepreneurial and Business Failure in Agribusiness: Evidence from an Emerging Economy

Entrepreneurship and new business development hold considerable promise for economic development and upward mobility, especially in emerging economies. Understanding failure of new businesses and entrepreneurship would go a long way in avoiding failure and promoting the success of new business development in emerging economies. Using qualitative data from interviews, we identified reasons for the failure of a group of entrepreneurs associated with a novel agribusiness activity in an otherwise, economically attractive market. The results of our study show that the lack of a clear understanding of the production model, the tendency to copy from each other led to the creation of the joint agency that tied the collective fate of a group of entrepreneurs together. This sort of herd mentality and behavior led to a premature closure of experimentation and individual learning that may have improved the chances of success. We discuss the policy and research implications of the paper