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Entrepreneurship, risk perception and firm performance

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  • M.A. Boermans
  • Daan Willebrands

Abstract

Risk attitudes of entrepreneurs are well-established drivers of business performance. Most empirical studies in this field only take into account risk propensity, leaving out the complementary concept of risk perception. Using data on 611 entrepreneurs from Tanzania, we show that risk perception is positively associated with business performance. In addition, we classify the entrepreneurs in four different groups based on their risk profile. The results show that the worst performing entrepreneurs are those with low risk perception and high risk propensity.

Suggested Citation

  • M.A. Boermans & Daan Willebrands, 2017. "Entrepreneurship, risk perception and firm performance," Working Papers 17-04, Utrecht School of Economics.
    • Handle: RePEc:use:tkiwps:1704
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    References listed on IDEAS

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    Cited by:

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    2. Boban Melović & Slavica Mitrović Veljković & Dragana Ćirović & Tamara Backović Vulić & Marina Dabić, 2022. "Entrepreneurial decision-making perspectives in transition economies – tendencies towards risky/rational decision-making," International Entrepreneurship and Management Journal, Springer, vol. 18(4), pages 1739-1773, December.
    3. Mariano Puglisi & Vincenzo Fasone & Giulio Pedrini & Deborah Gervasi & Guglielmo Faldetta, 2022. "Using a dual system of reasoning in small businesses: Entrepreneurial decisions and subjective risk intelligence," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 529-553, June.
    4. Martijn A. Boermans & Daan Willebrands, 2018. "Financial Constraints Matter: Empirical Evidence On Borrowing Behavior, Microfinance And Firm Productivity," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-24, June.
    5. Tazeen Imran & Rizwan Raheem Ahmed & Dalia Streimikiene & Riaz Hussain Soomro & Vishnu Parmar & Jolita Vveinhardt, 2019. "Assessment of Entrepreneurial Traits and Small-Firm Performance with Entrepreneurial Orientation as a Mediating Factor," Sustainability, MDPI, vol. 11(19), pages 1-23, September.
    6. Hanna Berkel & Finn Tarp, 2022. "Informality and Firm Performance in Myanmar," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1363-1382, July.
    7. Eijaz Ahmed Khan & Lynne Harris & Mohammed Quaddus, 2021. "The mediating role of personality traits on the entrepreneurial orientation–firm performance relationship: informal entrepreneurship context," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 41-52, December.

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    Keywords

    risk attitude; risk perception; risk propensity; entrepreneurship; business performance; Africa;
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