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Entrepreneurial motivation and entrepreneurial leadership of entrepreneurs: evidence from the formal and informal economies

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  • Retno Ardianti
  • Inggrid

Abstract

Micro, small and medium enterprises (MSMEs) have played a pivotal role in the economy of developing countries. Intriguingly, only a small fraction of MSMEs are legally registered as formal enterprises, and they typically lack entrepreneurial management. Our paper is to test the influence of formality status on entrepreneurial motivation and leadership among active entrepreneurs. To gather data, we surveyed formal and informal entrepreneurs in East Java, Indonesia. Our results show that formal entrepreneurs score higher in all dimensions of the entrepreneurial motivation variable compared to informal entrepreneurs, except for desire for wealth. Yet, only entrepreneurial opportunity is statistically significant among all the entrepreneurial motivation dimensions. Furthermore, while informal entrepreneurs seem to accept more risk and have higher achievement than their counterpart in the formal sector, this does not apply to the other dimensions of entrepreneurial leadership. For this variable, only proactive behaviour is significantly different from zero.

Suggested Citation

  • Retno Ardianti & Inggrid, 2018. "Entrepreneurial motivation and entrepreneurial leadership of entrepreneurs: evidence from the formal and informal economies," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 33(2), pages 159-175.
    • Handle: RePEc:ids:ijesbu:v:33:y:2018:i:2:p:159-175
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    Cited by:

    1. Syed Ali Fazal & Abdullah Al Mamun & Ali Saleh Alshebami & Rajennd Muniady & Mohd Helmi Ali & Sayed Samer Ali Al Shami & Salem Handhal Al Marri & Abdullah Hamoud Ali Seraj & Murad Thomran & Faiz Algob, 2022. "Entrepreneurial Motivation, Competency and Micro-Enterprise Sustainability Performance: Evidence from an Emerging Economy," Sustainability, MDPI, vol. 14(19), pages 1-20, October.

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