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Entrepreneurship, risk perception and firm performance

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  • Martijn Adriaan Boermans
  • Daan Willebrands

Abstract

Risk attitudes of entrepreneurs are well-established drivers of business performance. Most empirical studies in this field only take into account risk propensity, leaving out the complementary concept of risk perception. Using data on 611 entrepreneurs from Tanzania, we show that risk perception is positively associated with business performance. In addition, we classify the entrepreneurs in four different groups based on their risk profile. The results show that the worst performing entrepreneurs are those with low risk perception and high risk propensity.

Suggested Citation

  • Martijn Adriaan Boermans & Daan Willebrands, 2017. "Entrepreneurship, risk perception and firm performance," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 31(4), pages 557-569.
    • Handle: RePEc:ids:ijesbu:v:31:y:2017:i:4:p:557-569
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    Cited by:

    1. Lennard Hohl & Peter M. Bican & Carsten C. Guderian & Frederik J. Riar, 2021. "Gender Diversity Effects in Investment Decisions," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 134-152, March.
    2. Boban Melović & Slavica Mitrović Veljković & Dragana Ćirović & Tamara Backović Vulić & Marina Dabić, 2022. "Entrepreneurial decision-making perspectives in transition economies – tendencies towards risky/rational decision-making," International Entrepreneurship and Management Journal, Springer, vol. 18(4), pages 1739-1773, December.
    3. Donald Cyndyl L. Miguel & Rosalie C. Gemina & Ryan Christian Tagal Bustillo, 2024. "Linking Entrepreneurial Competencies and Financial Risk: Pathways to Sustainable Business Growth," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(14), pages 481-489, November.
    4. Martijn A. Boermans & Daan Willebrands, 2018. "Financial Constraints Matter: Empirical Evidence On Borrowing Behavior, Microfinance And Firm Productivity," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-24, June.
    5. Tazeen Imran & Rizwan Raheem Ahmed & Dalia Streimikiene & Riaz Hussain Soomro & Vishnu Parmar & Jolita Vveinhardt, 2019. "Assessment of Entrepreneurial Traits and Small-Firm Performance with Entrepreneurial Orientation as a Mediating Factor," Sustainability, MDPI, vol. 11(19), pages 1-23, September.
    6. Gundula Glowka & Richard Hule & Anita Zehrer, 2024. "Risk perception of SMEs: strategic risks, family-related risks, external risks," Risk Management, Palgrave Macmillan, vol. 26(4), pages 1-27, December.
    7. Eijaz Ahmed Khan & Lynne Harris & Mohammed Quaddus, 2021. "The mediating role of personality traits on the entrepreneurial orientation–firm performance relationship: informal entrepreneurship context," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 41-52, December.
    8. Mariano Puglisi & Vincenzo Fasone & Giulio Pedrini & Deborah Gervasi & Guglielmo Faldetta, 2022. "Using a dual system of reasoning in small businesses: Entrepreneurial decisions and subjective risk intelligence," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 529-553, June.
    9. Quang Khai Nguyen, 2024. "How Does Financial Flexibility Strategy Impact on Risk Management Effectiveness?," SAGE Open, , vol. 14(2), pages 21582440241, May.
    10. Hanna Berkel & Finn Tarp, 2022. "Informality and Firm Performance in Myanmar," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1363-1382, July.

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