CHARACTERISTICS OF SMALL-SCALE BUSINESS OWNERS: A META-ANALYSIS ON EMERGENCE AND SUCCESS
Andreas Rauch, University of Giessen
Principal Topic
Assessing characteristics of entrepreneurs is one of the classical approaches to entrepreneurship and there is already a vast amount of empirical knowledge existing. Current entrepreneurship theory, however, has stopped looking at characteristics of business owners for theoretical and empirical reasons. Unfortunately, this step is based on conclusions drawn from narrative reviews. This study uses meta-analysis to quantify effects of owners’ characteristics. I hypothesize that there is a small and positive relationship between owners’ characteristics, entrepreneurship and success. This relationship is moderated by the specificity of measures of owners’ characteristics. Further, effects are stronger for the decision to start a company than for business success. Finally, firm-level entrepreneurship produces higher effects than individual-level entrepreneurship.
Method
Our current database consists of 260 effect sizes, based on 93 different studies. About half of the studies were published in peer-reviewed journals. First analysis focused on need for achievement (K=37, N=6118), internal locus of control (K=37, N=6503), risk-taking (K=21, N=3542), self-efficacy (K=15, N=2208), innovativeness (K=12, N=1402), and pro-activity (K=11, N=1402).
Results and Implications
Preliminary results indicate that business owners differ significantly from other populations in all of the six characteristics (effect size “d” varying between .22 for risk-taking and .73 for self-efficacy). Moreover, personality characteristics relate with business success, weighted mean correlation ranged between .11 (locus of control) and .27 (self-efficacy). The exception was risk-taking, which was not related with success. Tests for homogeneity indicate consistently the presence of moderators. One moderator is the type of criterion used. Effect sizes are about zero, when using survival as criterion, they are small for hard criteria, such as sales growth, and medium for soft criteria, such as success ratings. Further analyses will focus on the hypothesized moderator effects.
Implications of results are two fold: First, by quantifying two decades of research, I try to provide a more objective assessment of the impact of owners’ characteristics. Second, by testing assumptions of modern personality theory, including specificity of measures and moderators, I try to use a sophisticated approach rather than assuming a direct effect model. In this way, this study tries to reduce the controversy in the debate about the impact of characteristics of small business owners.
CONTACT: Andreas Rauch, University of Giessen, Department of Work and Organizational Psychology, Otto-Behagel-Str. 10F, 35394 Giessen, Germany; (T) +49 (0)641 9926017; (F)+49 (0)641 9926049; arauch@psychol.uni-giessen.de
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