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Incentives and the growth of Oaxacan subsistence businesses

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  • Toledo, Arcelia
  • Hernández, José de la Paz
  • Griffin, Denis

Abstract

This research evaluates a theoretical model that explains the growth and internationalization of 76 small pottery subsistence businesses in two communities in Oaxaca, Mexico as an agency problem. The model complements resource-based explanations of growth and internationalization for small firms. Based on in-depth interviews and industry sector data, descriptive statistics, Pearson correlation, and partial correlation are used to confirm the viability of the model. Results suggest that government actions have countervailing positive and negative relationships to sales growth. In both communities, government programs are positively associated with desired outcomes such as net profits and growth because they reduce the merchants' perceived financial risks. Concurrently, government programs are negatively associated to growth because subsistence entrepreneurs' perceptions of the government's political and self-serving motivations hinder their adopting and taking full advantage of government programs.

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  • Toledo, Arcelia & Hernández, José de la Paz & Griffin, Denis, 2010. "Incentives and the growth of Oaxacan subsistence businesses," Journal of Business Research, Elsevier, vol. 63(6), pages 630-638, June.
    • Handle: RePEc:eee:jbrese:v:63:y:2010:i:6:p:630-638
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    Cited by:

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    2. Ingenbleek, Paul T.M. & Tessema, Workneh Kassa & van Trijp, Hans C.M., 2013. "Conducting field research in subsistence markets, with an application to market orientation in the context of Ethiopian pastoralists," International Journal of Research in Marketing, Elsevier, vol. 30(1), pages 83-97.
    3. Kumar, Avinash & Kumra, Rajeev & Singh, Ramendra, 2022. "Base of the pyramid producers’ constraints: An integrated review and research agenda," Journal of Business Research, Elsevier, vol. 140(C), pages 115-129.
    4. Ronika Chakrabarti, 2021. "Why art matters: Artistic consumer‐entrepreneurship in subsistence marketplaces," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(1), pages 134-150, March.
    5. Luis Mendoza-Ramirez & Arcelia Toledo-Lopez & Patricia Arieta-Melgarejo, 2016. "The Response Of Small Businesses Facing Nature Crisis: The Human Capital In The Strategic Orientationperformnace Relationship, Desempeno, Capital Humano Y Desastres Naturales: Estrategias Para El Sect," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 9(3), pages 29-41.
    6. Toledo-López, Arcelia & Díaz-Pichardo, René & Jiménez-Castañeda, Julio C. & Sánchez-Medina, Patricia S., 2012. "Defining success in subsistence businesses," Journal of Business Research, Elsevier, vol. 65(12), pages 1658-1664.
    7. Arcelia Toledo-Lopez & Luis Mendoza-Ramirez & Patricia Soledad Sánchez-Medina, 2016. "Success Of The Handicraft Subsistence Business And Its Relationship With Business Perfomance, El Exito De Los Negocios De Subsistencia De Artesania Y Su Relacion Con El Desempeno," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 9(1), pages 57-68.
    8. Patricia S. Sánchez-Medina & Jack Corbett & Arcelia Toledo-López, 2011. "Environmental Innovation and Sustainability in Small Handicraft Businesses in Mexico," Sustainability, MDPI, vol. 3(7), pages 1-19, July.
    9. Carlos M. Jardon & Nilda C. Tañski & Xavier Martinez-Cobas, 2023. "Sources of knowledge for innovation capability in subsistence small businesses: a case of the wood sector in Argentina," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(3), pages 839-860, June.
    10. Roy, Subhadip & Mohapatra, Subhalaxmi, 2023. "Exploring the culture–creativity–innovation triad in the handicraft industry using an interpretive approach," Journal of Business Research, Elsevier, vol. 156(C).

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