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Entrepreneurial motivation and business performance: evidence from a French Microfinance Institution

Renaud Bourlès () and Anastasia Cozarenco ()
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Anastasia Cozarenco: Montpellier Business School, Montpellier Research in Management, and Centre for European Research in Microfinance (CERMi)

Small Business Economics, 2018, vol. 51, issue 4, 943-963

Abstract: Abstract This article examines the link between entrepreneurial motivation and business performance in the French microfinance context. Using hand-collected data on business microcredits from a Microfinance Institution (MFI), we provide an indirect measure of entrepreneurial success through loan repayment performance. Controlling for the endogeneity of entrepreneurial motivation in a bivariate probit model, we find that “necessity entrepreneurs” are more likely to have difficulty repaying their microcredits than “opportunity entrepreneurs”. However, type of motivation does not appear to make a difference to business survival. We test for the robustness of our results using parametric duration models and show that necessity entrepreneurs experience difficulties in loan repayment earlier than their opportunity counterparts, corroborating our initial findings. Our results are also robust to a sharper analysis of motivation, focusing on unemployment (on the necessity side) and non-pecuniary benefits from success (on the opportunity side).

Keywords: Opportunity and necessity entrepreneurs; Business microcredit; Loan repayment; Business survival (search for similar items in EconPapers)
JEL-codes: C30 C41 G21 L26 M13 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Entrepreneurial Motivation and Business Performance: Evidence from a French Microfinance Institution (2018) Downloads
Working Paper: Entrepreneurial Motivation and Business Performance: Evidence from a French Microfinance Institution (2017) Downloads
Working Paper: Entrepreneurial Motivation and Business Performance: Evidence from a French Microfinance Institution (2017) Downloads
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