The impact of risk attitudes on micro-enterprise performance: evidence from urban markets of Maputo, Mozambique

• Autor(a) principal: Jacob, Simon Arthur William
• Data de Publicação: 2017
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/22257
• topic: Risk aversion; Microenterprises; Business performance; Business growth.; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

Sound policies to promote private sector growth in developing countries are of crucial importance to create employment and fight poverty. Despite the fact that microenterprises are the most common type of business in low income countries, little is known about the determinants of microenterprise survival and growth. Although risk attitudes have been shown to be an important determinant of entrepreneurship, their relationship with business growth and success remains unclear. To examine this relationship, we use a novel dataset collected among urban micro-entrepreneurs in Mozambique, including an empirically validated risk measure. We find that risk attitudes are strongly correlated to microenterprise revenues and costs, and also with business practices regarding stock management. Our findings imply that risk loving entrepreneurs are more likely to grow their businesses relative to their risk averse counterparts.