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The Impact of Entrepreneur-CEOs in Microfinance Institutions: A Global Survey

Author

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  • Trond Randøy

  • R. Øystein Strøm
  • Roy Mersland

    (UIA - University of Agder)

Abstract

Microfinance is a global high-growth industry, in which entrepreneurship is prevalent and substantial. Based on the theoretical argument that microfinance entrepreneur-CEOs are "motivated agents" with a unique ability to hire and socialize mission-oriented staff, we hypothesize that these CEOs produce more sustainable microfinance institutions with better social performance and lower costs. This study utilizes data from 295 microfinance institutions in 73 developing countries, assessed between 1998 and 2010. Our empirical evidence suggests that entrepreneur-managed microfinance institutions feature higher social performance, greater financial sustainability, and lower costs.

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  • Trond Randøy & R. Øystein Strøm & Roy Mersland, 2015. "The Impact of Entrepreneur-CEOs in Microfinance Institutions: A Global Survey," Post-Print hal-05220877, HAL.
    • Handle: RePEc:hal:journl:hal-05220877
    DOI: 10.1111/etap.12085
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    Cited by:

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    2. D. Pascal & R. Mersland & N. Mori, 2017. "The influence of the CEO’s business education on the performance of hybrid organizations: the case of the global microfinance industry," Small Business Economics, Springer, vol. 49(2), pages 339-354, August.
    3. Golesorkhi, Sougand & Mersland, Roy & Randøy, Trond & Shenkar, Oded, 2019. "The Performance Impact of Informal and Formal Institutional Differences in Cross-Border Alliances," International Business Review, Elsevier, vol. 28(1), pages 104-118.
    4. Sommeno, Tigist Woldetsadik & Mersland, Roy & Randøy, Trond, 2024. "The impact of liability of foreignness on performance in hybrid organizations," Journal of International Management, Elsevier, vol. 30(2).
    5. Golesorkhi, Sougand & Mersland, Roy & Piekkari, Rebecca & Pishchulov, Grigory & Randøy, Trond, 2019. "The effect of language use on the financial performance of microfinance banks: Evidence from cross-border activities in 74 countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(3), pages 213-229.
    6. Ndaki, Daudi Pascal & Beisland, Leif Atle & Mersland, Roy, 2018. "Capital structure and CEO tenure in microfinance institutions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 27(4), pages 329-337.
    7. Roy Mersland & Leif Atle Beisland & Daudi Pascal, 2019. "The Origin of Chief Executive Officers and Performance in Hybrid Businesses: The Case of Microfinance," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(4), pages 1578-1594, October.
    8. D’Espallier, Bert & Goedecke, Jann & Hudon, Marek & Mersland, Roy, 2017. "From NGOs to Banks: Does Institutional Transformation Alter the Business Model of Microfinance Institutions?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 89, pages 19-33.
    9. Malikov, Emir & Hartarska, Valentina & Mersland, Roy, 2020. "Economies of diversification in microfinance: Evidence from quantile estimation on panel data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34, pages 1-7.

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