New Business Entry Density as a Pathway to Strategic Decisions in Firm Formation and Job Creation in Akwa Ibom State, Nigeria
Firm formation and job creation is still a concern of researchers and policy makers in a developing economy such as Nigeria. Data suggest in Akwa Ibom State that business registration and unemployment is increasing which is a deviation from job creating capabilities of firms’ formation. This study sought to examine the effect new business entry indicators on job creation in Akwa Ibom State, Nigeria in order to establish a pathway to strategic decisions in firm formation. Using ex post facto research design, 26 years data of new business registrations in Akwa Ibom State was obtained from the Corporate Affairs Commission totalling 8772 new business registrations between 1991 and 2018. Two additional variables were calculated from business registration and used as business entry indicators – entry change and new business entry density. Using total population technique, trend graphs and multiple regression models were used for the data analysis. Result revealed that new business entry density is a stronger indicator for analysis, implementation and evaluation new firms’ formation’s ability to create jobs and reduce unemployment (p-value <0.01, t-value = -4.155, trend line – 9.23+27.13x) rather new business entry (business registration). New business entry showed an inverse relationship with unemployment which satisfies theoretical unpinning that firms’ formation will lead to reduction in unemployment. We recommend this pathway for analysis, implementation, and evaluation outcome of new firms’ formation policies n Akwa Ibom State and Nigerian economy.