Who Are the Microenterprise Owners?

Edited by Suresh de Mel, David Mckenzie and Christopher Woodruff

in International Differences in Entrepreneurship

Published by University of Chicago Press

Published in print June 2010 | ISBN: 9780226473093
Published online February 2013 | e-ISBN: 9780226473109 | DOI:
Who Are the Microenterprise Owners?

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This chapter expands on the idea that people who become entrepreneurs differ systematically from those who become either remedial entrepreneurs or employees. It collects a very rich data set of individual characteristics for a sample of over 700 self-employed entrepreneurs, larger business owners, and employees in Sri Lanka. Two-thirds or more of the own-account workers have characteristics that are closer to wage workers than to small and medium-sized enterprise (SME) owners. Cognitive ability, motivation, and a competitive attitude are among the factors differentiating SME owners from microenterprise owners. Given the large amount of self-employment in low-income countries, these findings suggest that the possibility of job creation from the sector should not be ignored. But the analysis also clearly suggests that finance is not the sole constraint to growth of microenterprises and provides an explanation for the low rates of growth of enterprises supported by microlending.

Keywords: microenterprise owners; wage workers; low-income countries; own-account workers; employers; medium-sized enterprise

Chapter.  11106 words. 

Subjects: International Economics

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