Micro and small business risk-taking behaviour: does religion matter?

Ibrahim Fatwa Wijaya, Bambang Setiaji and Linggar Ikhsan Nugroho

International Journal of Entrepreneurship and Small Business, 2022, vol. 45, issue 3, 265-278

Abstract: This study aims to investigate the impact of Muslim entrepreneurs' religiosity on risk-taking behaviour, i.e., choosing a high-risk vs. low-risk lending product in Islamic banking. The authors used probit regression to test the role of entrepreneurs' religiosity in choosing mode of finance in Islamic banking. Data were collected using the questionnaire method; 249 respondents from the Central Java province, Indonesia, took part in this survey. The respondents are both micro and small enterprises. The findings reveal that the religiosity level of entrepreneurs has determinant effects on the risk-taking behaviour pattern, i.e., the more religious entrepreneurs prefer to have a less risky mode of finance.

Keywords: religiosity; risk-taking; Islamic banks; SMEs. (search for similar items in EconPapers)
Date: 2022
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