Aspirations, expectations, identities: behavioral constraints of micro-entrepreneurs

Catia Batista and Julia Seither

NOVAFRICA Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA

Abstract: This paper presents empirical evidence on the relationship between behavioral constraints and entrepreneurial success of micro-firms. Approximately 600 micro-entrepreneurs were randomized into treatments providing information about a role model, additionally the importance of establishing realistic goals, and how to maintain funds within their enterprises. Six months after implementation we find significant positive effects of shifts in aspirations on effort levels and savings. These effects can be precisely estimated even one year after implementation. On average, changes in investment behavior translate to increases in sales of 99% and 89% in profits compared to a control group. In contrast, human capital improvements have no effect on investment behavior. Furthermore, setting business goals mitigates the positive effects of role models on economic growth. Despite similar effects on effort levels, participants that condition their aspirations increase on a one-year goal save less and the positive effects on firm outcomes disappear over time.

Pages: 30 pages
Date: 2019
New Economics Papers: this item is included in nep-ent, nep-hrm, nep-mfd and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://novafrica.org/wp-content/uploads/2019/11/1906.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unl:novafr:wp1906

Access Statistics for this paper

More papers in NOVAFRICA Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA Contact information at EDIRC.
Bibliographic data for series maintained by Susana Lopes ().