IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/69778.html
   My bibliography  Save this paper

Time allocation and performance: the case of Chinese entrepreneurs

Author

Listed:
  • Talavera, Oleksandr
  • Xiong, Lin
  • Weir, Charlie

Abstract

This paper analyses the effect of time allocation on the financial performance of entrepreneurial firms. We apply the Lewbel (2012) estimator to a pooled dataset of Chinese private manufacturing firms that are managed by their owners. Time is allocated between management, networking and study activities. After accounting for endogeneity, we find an inverted U-shaped relationship between management hours and firm performance and between networking and firm performance. However, no relationship between time spent studying and firm performance is observed. We also find that the managing hours-performance relationship is particularly strong for companies managed by entrepreneurs who own more than 75% of share, for companies that are managed by owners with previous experience, for male entrepreneurs and for smaller sized firms.

Suggested Citation

  • Talavera, Oleksandr & Xiong, Lin & Weir, Charlie, 2016. "Time allocation and performance: the case of Chinese entrepreneurs," MPRA Paper 69778, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69778
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/69778/1/MPRA_paper_69778.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chen, Ming-Huei & Chang, Yu-Yu & Lee, Chia-Yu, 2015. "Creative entrepreneurs' guanxi networks and success: Information and resource," Journal of Business Research, Elsevier, vol. 68(4), pages 900-905.
    2. Oriana Bandiera & Renata Lemos & Andrea Prat & Raffaella Sadun, 2018. "Managing the Family Firm: Evidence from CEOs at Work," The Review of Financial Studies, Society for Financial Studies, vol. 31(5), pages 1605-1653.
    3. Cassar, Gavin, 2006. "Entrepreneur opportunity costs and intended venture growth," Journal of Business Venturing, Elsevier, vol. 21(5), pages 610-632, September.
    4. Bengt Holmstrom & Jean Tirole, 1997. "Financial Intermediation, Loanable Funds, and The Real Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 663-691.
    5. Ingrid Verheul & Martin Carree & Roy Thurik, 2009. "Allocation and productivity of time in new ventures of female and male entrepreneurs," Small Business Economics, Springer, vol. 33(3), pages 273-291, October.
    6. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2011. "What Do CEOs Do?," EIEF Working Papers Series 1101, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2010.
    7. Raj Chetty, 2012. "Bounds on Elasticities With Optimization Frictions: A Synthesis of Micro and Macro Evidence on Labor Supply," Econometrica, Econometric Society, vol. 80(3), pages 969-1018, May.
    8. Ari Hyytinen & Olli‐Pekka Ruuskanen, 2007. "Time Use of the Self‐Employed," Kyklos, Wiley Blackwell, vol. 60(1), pages 105-122, February.
    9. Todd R. Zenger, 1994. "Explaining Organizational Diseconomies of Scale in R&D: Agency Problems and the Allocation of Engineering Talent, Ideas, and Effort by Firm Size," Management Science, INFORMS, vol. 40(6), pages 708-729, June.
    10. George P. Baker & Brian J. Hall, 2004. "CEO Incentives and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 767-798, October.
    11. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    12. David G. McKendrick & Glenn R. Carroll, 2001. "On the Genesis of Organizational Forms: Evidence from the Market for Disk Arrays," Organization Science, INFORMS, vol. 12(6), pages 661-682, December.
    13. Jia Liu, 2012. "The Dynamics of Listed SMEs in China," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 19(3), pages 421-450, November.
    14. Michael Lubatkin & John Florin & William S. Schulze, 2003. "A social capital model of high growth ventures," Post-Print hal-02311715, HAL.
    15. Unger, Jens M. & Rauch, Andreas & Frese, Michael & Rosenbusch, Nina, 2011. "Human capital and entrepreneurial success: A meta-analytical review," Journal of Business Venturing, Elsevier, vol. 26(3), pages 341-358, May.
    16. Beffy, Magali & Blundell, Richard & Bozio, Antoine & Laroque, Guy & Tô, Maxime, 2019. "Labour supply and taxation with restricted choices," Journal of Econometrics, Elsevier, vol. 211(1), pages 16-46.
    17. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    18. Michael Lubatkin & John Florin & William S. Schulze, 2003. "A social capital model of high growth ventures," Post-Print hal-02276699, HAL.
    19. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, February.
    20. Panagiotis Ganotakis, 2012. "Founders’ human capital and the performance of UK new technology based firms," Small Business Economics, Springer, vol. 39(2), pages 495-515, September.
    21. Arthur Lewbel, 2012. "Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 67-80.
    22. Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    23. Zélia Serrasqueiro & Paulo Maçãs Nunes, 2008. "Performance and size: empirical evidence from Portuguese SMEs," Small Business Economics, Springer, vol. 31(2), pages 195-217, August.
    24. Rose, Caspar, 2005. "Managerial Ownership and Firm Performance in Listed Danish Firms:: In Search of the Missing Link," European Management Journal, Elsevier, vol. 23(5), pages 542-553, October.
    25. Margaret A. Abernethy & Jan Bouwens & Laurence Van Lent, 2013. "The Role of Performance Measures in the Intertemporal Decisions of Business Unit Managers," Contemporary Accounting Research, John Wiley & Sons, vol. 30(3), pages 925-961, September.
    26. Ulrike Malmendier & Geoffrey Tate, 2009. "Superstar CEOs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1593-1638.
    27. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    28. John Goddard & Manouche Tavakoli & John Wilson, 2005. "Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model," Applied Financial Economics, Taylor & Francis Journals, vol. 15(18), pages 1269-1282.
    29. James S. Ang & Rebel A. Cole & James Wuh Lin, 2000. "Agency Costs and Ownership Structure," Journal of Finance, American Finance Association, vol. 55(1), pages 81-106, February.
    30. Marcel Fafchamps, 2002. "Returns to social network capital among traders," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 173-206, April.
    31. Oleksandr Talavera & Lin Xiong & Xiong Xiong, 2012. "Social Capital and Access to Bank Financing: The Case of Chinese Entrepreneurs," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(1), pages 55-69, January.
    32. Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
    33. Marianne P. Bitler & Tobias J. Moskowitz & Annette Vissing‐Jørgensen, 2005. "Testing Agency Theory with Entrepreneur Effort and Wealth," Journal of Finance, American Finance Association, vol. 60(2), pages 539-576, April.
    34. Levesque, Moren & Shepherd, Dean A. & Douglas, Evan J., 2002. "Employment or self-employment: A dynamic utility-maximizing model," Journal of Business Venturing, Elsevier, vol. 17(3), pages 189-210, May.
    35. John C. Ham & Kevin T. Reilly, 2002. "Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data," American Economic Review, American Economic Association, vol. 92(4), pages 905-927, September.
    36. Andres, Christian, 2008. "Large shareholders and firm performance--An empirical examination of founding-family ownership," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 431-445, September.
    37. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    38. Hung-Gay Fung & Xiaoqing Eleanor Xu & Qi-Zi Zhang, 2007. "On The Financial Performance Of Private Enterprises In China," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 399-414.
    39. Jun Du & Sourafel Girma, 2012. "Firm Size, Source of Finance, and Growth - Evidence from China," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 19(3), pages 397-419, November.
    40. McKnight, Phillip J. & Weir, Charlie, 2009. "Agency costs, corporate governance mechanisms and ownership structure in large UK publicly quoted companies: A panel data analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 139-158, May.
    41. Burmeister-Lamp, Katrin & Lévesque, Moren & Schade, Christian, 2012. "Are entrepreneurs influenced by risk attitude, regulatory focus or both? An experiment on entrepreneurs' time allocation," Journal of Business Venturing, Elsevier, vol. 27(4), pages 456-476.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mustafa Caglayan & Oleksandr Talavera & Lin Xiong & Jing Zhang, 2022. "What does not kill us makes us stronger: the story of repetitive consumer loan applications," The European Journal of Finance, Taylor & Francis Journals, vol. 28(1), pages 46-65, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Unger, Jens M. & Rauch, Andreas & Frese, Michael & Rosenbusch, Nina, 2011. "Human capital and entrepreneurial success: A meta-analytical review," Journal of Business Venturing, Elsevier, vol. 26(3), pages 341-358, May.
    2. Enrico Santarelli & Hien Tran, 2013. "The interplay of human and social capital in shaping entrepreneurial performance: the case of Vietnam," Small Business Economics, Springer, vol. 40(2), pages 435-458, February.
    3. Christian Engelen, 2015. "The effects of managerial discretion on moral hazard related behaviour: German evidence on agency costs," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(4), pages 927-960, November.
    4. Klyver, Kim & Steffens, Paul & Lomberg, Carina, 2020. "Having your cake and eating it too? A two-stage model of the impact of employment and parallel job search on hybrid nascent entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(5).
    5. Avnimelech, Gil & Rechter, Eyal, 2023. "How and why accelerators enhance female entrepreneurship," Research Policy, Elsevier, vol. 52(2).
    6. Antonio Lecuna, 2014. "Opportunity-motivated entrepreneurs’ growth expectations in Latin America and the moderating effect of education and exports," Serie Working Papers 18, Universidad del Desarrollo, School of Business and Economics, revised Dec 2014.
    7. Honjo, Yuji & Kwak, Charee & Uchida, Hirofumi, 2022. "Initial funding and founders’ human capital: An empirical analysis using multiple surveys for start-up firms," Japan and the World Economy, Elsevier, vol. 63(C).
    8. Afzalur Rashid, 2015. "Revisiting Agency Theory: Evidence of Board Independence and Agency Cost from Bangladesh," Journal of Business Ethics, Springer, vol. 130(1), pages 181-198, August.
    9. Antonio Lecuna & Boyd Cohen & Roberto Chavez, 2017. "Characteristics of high-growth entrepreneurs in Latin America," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 141-159, March.
    10. Thorsten Semrau & Christian Hopp, 2016. "Complementary or compensatory? A contingency perspective on how entrepreneurs’ human and social capital interact in shaping start-up progress," Small Business Economics, Springer, vol. 46(3), pages 407-423, March.
    11. Honjo, Yuji, 2021. "The impact of founders’ human capital on initial capital structure: Evidence from Japan," Technovation, Elsevier, vol. 100(C).
    12. Tatiana S. Manolova & Nancy M. Carter & Ivan M. Manev & Bojidar S. Gyoshev, 2007. "The Differential Effect of Men and Women Entrepreneurs’ Human Capital and Networking on Growth Expectancies in Bulgaria," Entrepreneurship Theory and Practice, , vol. 31(3), pages 407-426, May.
    13. Andreas Rauch & Serge A. Rijsdijk, 2013. "The Effects of General and Specific Human Capital on Long–Term Growth and Failure of Newly Founded Businesses," Entrepreneurship Theory and Practice, , vol. 37(4), pages 923-941, July.
    14. Jared Allen & Regan Stevenson & Tang Wang, 2021. "Creative and resourceful: How human, social, and psychological resources affect creative workers’ ability to rebound after failure," Small Business Economics, Springer, vol. 57(2), pages 705-719, August.
    15. Celestine Katongole & John C. Munene & Muhammed Ngoma & Samuel Dawa & Arthur Sserwanga, 2015. "Entrepreneur’s Intrapersonal Resources and Enterprise Success among Micro and Small Scale Women Entrepreneurs," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 405-447, December.
    16. Backes-Gellner, Uschi & Moog, Petra, 2013. "The disposition to become an entrepreneur and the jacks-of-all-trades in social and human capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 55-72.
    17. Ömer Tuğsal Doruk & Bahadır Ergün, 2023. "Friend or foe? The link between agency cost and financialization in Turkey," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1689-1705, April.
    18. Rossi, Fabrizio & Barth, James R. & Cebula, Richard J., 2018. "Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies," Research in International Business and Finance, Elsevier, vol. 46(C), pages 181-200.
    19. Eriko Naiki & Yuta Ogane, 2022. "Human capital effects on fundraising for necessity- and opportunity-based entrepreneurs," Small Business Economics, Springer, vol. 59(2), pages 721-741, August.
    20. Masatoshi Kato, 2017. "Founders’ human capital and external knowledge sourcing: An absorptive capacity perspective for innovative start-ups," Discussion Paper Series 162, School of Economics, Kwansei Gakuin University, revised Jun 2017.

    More about this item

    Keywords

    Time allocation; owner manager businesses; China;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:69778. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.