Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market

Small-scale entrepreneurs are ubiquitous in emerging market economies, yet very few graduate to become larger businesses. This paper asks whether such entrepreneurs aspire to grow and, if so, on which dimensions of the business? What factors influe...

Full description

Bibliographic Details
Main Authors:	Dalton, Patricio S., Ruschenpohler, Julius, Zia, Bilal
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	BUSINESS ENVIRONMENT SMALL AND MEDIUM ENTERPRISES EMERGING MARKET ECONOMIES BUSINESS ASPIRATIONS ADAPTIVE LEARNING MICROENTERPRISE INNOVATION FIRM PERFORMANCE
Online Access:	http://documents.worldbank.org/curated/en/641061523463737564/Determinants-and-dynamics-of-business-aspirations-evidence-from-small-scale-entrepreneurs-in-an-emerging-market http://hdl.handle.net/10986/29670

id	okr-10986-29670
recordtype	oai_dc
spelling	okr-10986-296702021-06-08T14:42:45Z Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market Dalton, Patricio S. Ruschenpohler, Julius Zia, Bilal BUSINESS ENVIRONMENT SMALL AND MEDIUM ENTERPRISES EMERGING MARKET ECONOMIES BUSINESS ASPIRATIONS ADAPTIVE LEARNING MICROENTERPRISE INNOVATION FIRM PERFORMANCE Small-scale entrepreneurs are ubiquitous in emerging market economies, yet very few graduate to become larger businesses. This paper asks whether such entrepreneurs aspire to grow and, if so, on which dimensions of the business? What factors influence these aspirations, how realistic are they, and do entrepreneurs dynamically update them based on realized outcomes? A unique panel data set of small-scale retailers in Indonesia is used to show that the average business has strong short- and long-term aspirations for growth in shop size, number of employees, number of customers, and sales. Yet, more than 50 percent of the businesses report no aspirations for growth in the next 12 months, and 16 percent fail to imagine an ideal business over the long term. Entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. Analysis from a year later shows that most entrepreneurs fail to set realistic aspirations at baseline, but significantly adjust their aspirations to realistic levels with realized outcomes. The analysis also shows that baseline aspirations are a strong predictor of measures of business expansion and innovation, as well as performance outcomes a year later. 2018-04-12T18:38:36Z 2018-04-12T18:38:36Z 2018-04 Working Paper http://documents.worldbank.org/curated/en/641061523463737564/Determinants-and-dynamics-of-business-aspirations-evidence-from-small-scale-entrepreneurs-in-an-emerging-market http://hdl.handle.net/10986/29670 English Policy Research Working Paper;No. 8400 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BUSINESS ENVIRONMENT SMALL AND MEDIUM ENTERPRISES EMERGING MARKET ECONOMIES BUSINESS ASPIRATIONS ADAPTIVE LEARNING MICROENTERPRISE INNOVATION FIRM PERFORMANCE
spellingShingle	BUSINESS ENVIRONMENT SMALL AND MEDIUM ENTERPRISES EMERGING MARKET ECONOMIES BUSINESS ASPIRATIONS ADAPTIVE LEARNING MICROENTERPRISE INNOVATION FIRM PERFORMANCE Dalton, Patricio S. Ruschenpohler, Julius Zia, Bilal Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
geographic_facet	East Asia and Pacific Indonesia
relation	Policy Research Working Paper;No. 8400
description	Small-scale entrepreneurs are ubiquitous in emerging market economies, yet very few graduate to become larger businesses. This paper asks whether such entrepreneurs aspire to grow and, if so, on which dimensions of the business? What factors influence these aspirations, how realistic are they, and do entrepreneurs dynamically update them based on realized outcomes? A unique panel data set of small-scale retailers in Indonesia is used to show that the average business has strong short- and long-term aspirations for growth in shop size, number of employees, number of customers, and sales. Yet, more than 50 percent of the businesses report no aspirations for growth in the next 12 months, and 16 percent fail to imagine an ideal business over the long term. Entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. Analysis from a year later shows that most entrepreneurs fail to set realistic aspirations at baseline, but significantly adjust their aspirations to realistic levels with realized outcomes. The analysis also shows that baseline aspirations are a strong predictor of measures of business expansion and innovation, as well as performance outcomes a year later.
format	Working Paper
author	Dalton, Patricio S. Ruschenpohler, Julius Zia, Bilal
author_facet	Dalton, Patricio S. Ruschenpohler, Julius Zia, Bilal
author_sort	Dalton, Patricio S.
title	Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
title_short	Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
title_full	Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
title_fullStr	Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
title_full_unstemmed	Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market
title_sort	determinants and dynamics of business aspirations : evidence from small-scale entrepreneurs in an emerging market
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/641061523463737564/Determinants-and-dynamics-of-business-aspirations-evidence-from-small-scale-entrepreneurs-in-an-emerging-market http://hdl.handle.net/10986/29670
_version_	1764469938437750784

Determinants and Dynamics of Business Aspirations : Evidence from Small-Scale Entrepreneurs in an Emerging Market

Similar Items