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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: CERMi - Centre for European Research in Microfinance, MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier

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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 build a stylized model to develop formal arguments supporting this outcome. 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.

Keywords: opportunity and necessity entrepreneurs; business microcredit; loan repayment; business survival (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-eur and nep-mfd
Date: 2018-12
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01954474
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Published in Small Business Economics, Springer Verlag, 2018, 51 (4), pp.943-963. ⟨https://link.springer.com/article/10.1007%2Fs11187-017-9961-8⟩. ⟨10.1007/s11187-017-9961-8⟩

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Journal Article: 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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