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

Author

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  • Renaud Bourlès

    (Aix-Marseille Université, CNRS, EHESS, Centrale Marseille, AMSE)

  • Anastasia Cozarenco

    (Montpellier Business School, Montpellier Research in Management, and Centre for European Research in Microfinance (CERMi))

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).

Suggested Citation

  • Renaud Bourlès & Anastasia Cozarenco, 2018. "Entrepreneurial motivation and business performance: evidence from a French Microfinance Institution," Small Business Economics, Springer, vol. 51(4), pages 943-963, December.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:4:d:10.1007_s11187-017-9961-8
    DOI: 10.1007/s11187-017-9961-8
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    3. Renaud Bourlès & Anastasia Cozarenco, 2018. "Entrepreneurial motivation and business performance: evidence from a French Microfinance Institution," Small Business Economics, Springer, vol. 51(4), pages 943-963, December.
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    More about this item

    Keywords

    Opportunity and necessity entrepreneurs; Business microcredit; Loan repayment; Business survival;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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