In a free market economy the importance of small business as a major job supplier, innovator and source of growth is widely recognized. Given the importance of small business for an economy, the survival, success and performance of these firms is an issue of continuous concern. Research that can lead to the identification of those factors associated with small business performance is of great interest to policy makers, owner-managers and their advisors. This article aims at detecting predictors of small business profitability. Our objective is to distinguish internal factors of small construction companies that enhance firm profitability. Based on the data of an empirical survey in the construction industry to which certified financial data has been added, this paper investigates the influence of owner-manager human capital characteristics and selected management practices on the profitability of small construction companies. For this purpose, we develop and test a structural model. Results indicate that industry experience and level of education of the owner-manager and management practices such as avoidance of cash credit and the use of actual costing systems contribute to higher profitability. Furthermore, owner-manager human capital characteristics influence profitability both directly and indirectly.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: