Initiating nascent entrepreneurial activities

International Journal of Entrepreneurial Behavior & Research, Volume 21, Issue 1, Page 27-49, March 2015.

Purpose – The purpose of this paper is to examine the direct effect of two individual-level resources, one subjective and the other objective, and their interaction in influencing the business entry decision. By distinguishing perceived ability from actual ability and using theoretical underpinnings from the human capital theory and self-efficacy theory, the proposed hypotheses are tested on a data set comprising respondents from the adult population. Design/methodology/approach – Using 20,046 observations from the adult population survey (APS) collected according to the global entrepreneurship monitor (GEM) methodology, a logistic regression analysis controlling for robust interaction term is used to determine the direct and interaction effect of perceived entrepreneurial ability and actual ability in influencing the decision to initiate nascent entrepreneurial activities. Findings – The results reveal that perceived entrepreneurial ability has a distinct positive influence on the decision to initiate entrepreneurial activities and its impact is greater than that of actual abilities. Furthermore, the authors find evidence of a positive interaction effect suggesting that perceived entrepreneurial ability is a key determinant of entrepreneurial initiatives among those with high actual ability. Originality/value – The main contribution of the study is to highlight the role of subjective judgements of ability in influencing entrepreneurial behaviour. Whereas prior research has found that actual ability influences new venture performance, its influence on new business entry was inconclusive. By including perceived entrepreneurial ability to the model the authors not only establish a link between objective (observable) abilities and subjective (unobservable) abilities of individuals but also suggest the mechanism through which subjective ability perception drive the business entry decisions of individuals.
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The legitimacy of entrepreneurial mentoring

International Journal of Entrepreneurial Behavior & Research, Volume 21, Issue 2, April 2015.

Purpose This paper presents findings from longitudinal case studies of small firm mentoring relationships in Ireland. Our rationale is to explore the gaps between the theory and practice of small firm mentoring. Design/methodology/approach The paper uses a comparative case study design involving interviews, observation and secondary sources of evidence including business plans. Findings In contrast to the literature the paper extends the role of mentors in the small firm context as offering direct and indirect support, which reduces uncertainty in order to increase legitimacy of the business entity. Research limitations/implications The cases highlight a conflict between the broad theoretical scope of the mentor process versus a narrow role assumed by best practice. Practical implications The research presents an opportunity to enhance the pragmatic versus paternalistic perspective of small firm mentoring. We argue that for mentoring theory to be useful then a mentor’s role set in small firms may be wider and should be more direct than mentors in large corporations. Originality/value The emergent theoretical framework combines organisational learning and decision-making theories. The paper contributes to the theoretical development of mentoring by extending the range and defining the role of mentors in the context of small firms.
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Financial influences on export status of small and medium-sized enterprises in an emerging economy

Financial influences on export status of small and medium-sized enterprises in an emerging economy
Abu H. Ayob; Sveinn Vidar Gudmundsson; Mohd Hasimi Yaacob
International Journal of Entrepreneurship and Small Business, Vol. 24, No. 3 (2015) pp. 433 – 454
The purpose of this study is to understand financial and behavioural influences on the export status of small and medium-sized enterprises (SMEs) in an emerging economy. In particular, we tested the direct effects of perceived costs, internal financial resources and external capital constraint on the export status of SMEs. We also tested the moderating effect of cost sensitivity on two types of perceived export costs. Survey data was collected from 356 SMEs in Malaysia and analysed using logistic regression. The results show that exporters perceive higher ongoing costs but lower initiation costs of exporting. They also perceive higher internal financial resources, fewer constraints in accessing external capital and are more sensitive towards costs compared to non-exporters. Furthermore, we found that cost sensitivity moderates the relationship between perceived costs and export status.

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Predicting loan repayment default among second tier borrowers in Ghana

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Predicting loan repayment default among second tier borrowers in Ghana
Kwami Adanu; Emma Boateng
International Journal of Entrepreneurship and Small Business, Vol. 24, No. 3 (2015) pp. 417 – 432
This paper evaluates factors that affect the probability of loan repayment defaults using repayment data on loans granted by Snapi Aba Savings and Loans Ltd, Ghana. Results from logistic regression analysis of the data indicate that, contrary to findings elsewhere, age of borrowers is irrelevant in predicting probability of defaults in this study. Rather, credit screenings should focus on the gender of borrowers, payment frequency, loan cycle, and loan size. The probability of repayment defaults increases by about 1.3% for male borrowers as compared to female borrowers. Further, clients with longer credit history with the lending agency are more likely to default, and default probability is declining in loan size. Also, one-time lump-sum loan repayments reduce repayment defaults by about 2.2% as compared to regular monthly repayment options. Finally, educational level of borrowers and interest rates are irrelevant in predicting defaults.

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How to attract the crowd in crowdfunding?

How to attract the crowd in crowdfunding?
Sibin Wu; Bin Wang; Yuanqing Li
International Journal of Entrepreneurship and Small Business, Vol. 24, No. 3 (2015) pp. 322 – 334
We use signalling theory to study a new capital market finance phenomenon: crowdfunding in China. Our finding indicates that signals such as the frequency of announcements and the amount of the highest bid have an impact on the success of crowdfunding projects. Based on a sample of 192 projects collected on a Chinese crowdfunding platform, demohour.com, we find that the amount of the highest bid has a positive effect on completing a successful crowdfunding project. However, for high-tech industry, our results indicate the amount of the highest bid is not as effective as the movie/music industries. We also find the frequency of announcements made by the project founders is a better predictor for funding success in the high-tech industry than in the movie/music industries.

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