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As much as seventy percent of the world's population lives in highly impoverished regions of developing and emerging economies referred to as base-of-the-pyramid markets. Job creation is widely considered to be a key factor to alleviating poverty, and microenterprise growth is considered to be one avenue that can potentially facilitate significant job creation. At this point, however, little research exists to understand the factors that support microenterprise growth in these highly impoverished contexts. Drawing upon resource-based theory, we present hypotheses to explain how specific resources (i.e., access to utilities, financial and marketing knowledge, etc.) and resource allocation tactics (i.e., bootstrapping) facilitate microenterprise growth. We test these hypotheses using a survey of 156 South African microenterprises. While we find support for some of our hypotheses that resources and resource allocation tactics can support microenterprise growth, we also interestingly find that financial knowledge, banking capabilities, and having a credit line all deter microenterprise growth. We conclude with a discussion of how the institutional context of base-of-the-pyramid markets serves as a key moderator to the resource-performance relationship.
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