Entrepreneurial decision-making perspectives in transition economies – tendencies towards risky/rational decision-making

Boban Melović (), Slavica Mitrović Veljković (), Dragana Ćirović (), Tamara Backović Vulić () and Marina Dabic ()
Additional contact information
Boban Melović: University of Montenegro, Jovana Tomaševića
Slavica Mitrović Veljković: University of Novi Sad
Dragana Ćirović: University of Montenegro, Jovana Tomaševića
Tamara Backović Vulić: University of Montenegro, Jovana Tomaševića

International Entrepreneurship and Management Journal, 2022, vol. 18, issue 4, No 15, 1739-1773

Abstract: Abstract This paper assesses the ways in which the characteristics of entrepreneurs from transition economies, and the extent to which they participate in making business decisions, affect their propensity to make rational/risky decisions in a work environment. A multicontextual analysis of entrepreneurial decision-making is provided, facilitating a better understanding and the further advancement of entrepreneurship in the transition countries of Montenegro and Serbia. Logistic regression and a Structural Equation Model (SEM) were used to assess data collected from a stratified random sample of 260 entrepreneurs. The results reveal that the demographic characteristics of entrepreneurs have a significant impact on their propensity to make rational/risky decisions. Elderly entrepreneurs with more years of service are more prone to make rational decisions in comparison to younger entrepreneurs, who lack business experience and thus rely on intuition, leading to risky decision-making. Additionally, the results show that the more involved entrepreneurs are in the decision-making process, the more risky decisions will be made; while more employee inclusion leads to business decisions based on rational thinking. The results also reveal that entrepreneurs in transition economies have formed attitudes towards the nature of entrepreneurial activity. Finally, these results reveal that entrepreneurs who consider levels of economic development, national culture, and intuition to be important when making business decisions are more prone to implement risky decisions. Considering the obtained results, this paper provides guidelines for the future research of this issue in transition countries and other developing economies.

Keywords: Entrepreneurship; Transition economy; Decision-making; Risk; Risky decision; Rational decision (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s11365-021-00766-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:intemj:v:18:y:2022:i:4:d:10.1007_s11365-021-00766-2

Ordering information: This journal article can be ordered from
http://www.springer. ... urship/journal/11365

DOI: 10.1007/s11365-021-00766-2

Access Statistics for this article

International Entrepreneurship and Management Journal is currently edited by Salvador Roig

More articles in International Entrepreneurship and Management Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().