Growth expectations of business owners: impact of human capital, firm characteristics and environmental transition

Ruta Aidis, Tomasz Mickiewicz

Research output: Working paper

Abstract

This paper presents an empirical study based on a survey of 399 owners of small and medium size companies in Lithuania. Applying bivariate and ordered probit estimators, we investigate why some business owners expect their firms to expand, while others do not. Our main findings provide evidence that SME owner's generic and specific human capital matter. Those with higher education and 'learning by doing' attributes, either through previous job experience or additional entrepreneurial experience, expect their businesses to expand. The expectations of growth are positively related to exporting and non-monotonically to enterprise size. In addition, we analyse the link between the perceptions of constraints to business activities and growth expectations and find that the factors, which are perceived as main business barriers, are not necessary those which are associated with reduced growth expectations. In particular, perceptions of both corruption and of inadequate tax systems seem to affect growth expectations the most.
Original languageEnglish
Place of PublicationLondon (UK)
PublisherUniversity College London
Number of pages36
Publication statusPublished - 2005

Publication series

NameEconomics working paper
PublisherUCL SSEES : Centre for comparative economics
No.50

Fingerprint

Owners
Firm characteristics
Human capital
Company size
Business activity
Business growth
Corruption
Tax system
Specific human capital
Bivariate probit
Learning-by-doing
Small and medium-sized enterprises
Factors
Estimator
Empirical study
Lithuania
Ordered probit
Exporting

Keywords

  • corruption
  • employment
  • human capital
  • SME
  • taxes

Cite this

Aidis, R., & Mickiewicz, T. (2005). Growth expectations of business owners: impact of human capital, firm characteristics and environmental transition. (Economics working paper; No. 50). London (UK): University College London.
Aidis, Ruta ; Mickiewicz, Tomasz. / Growth expectations of business owners : impact of human capital, firm characteristics and environmental transition. London (UK) : University College London, 2005. (Economics working paper; 50).
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Aidis, R & Mickiewicz, T 2005 'Growth expectations of business owners: impact of human capital, firm characteristics and environmental transition' Economics working paper, no. 50, University College London, London (UK).

Growth expectations of business owners : impact of human capital, firm characteristics and environmental transition. / Aidis, Ruta; Mickiewicz, Tomasz.

London (UK) : University College London, 2005. (Economics working paper; No. 50).

Research output: Working paper

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N2 - This paper presents an empirical study based on a survey of 399 owners of small and medium size companies in Lithuania. Applying bivariate and ordered probit estimators, we investigate why some business owners expect their firms to expand, while others do not. Our main findings provide evidence that SME owner's generic and specific human capital matter. Those with higher education and 'learning by doing' attributes, either through previous job experience or additional entrepreneurial experience, expect their businesses to expand. The expectations of growth are positively related to exporting and non-monotonically to enterprise size. In addition, we analyse the link between the perceptions of constraints to business activities and growth expectations and find that the factors, which are perceived as main business barriers, are not necessary those which are associated with reduced growth expectations. In particular, perceptions of both corruption and of inadequate tax systems seem to affect growth expectations the most.

AB - This paper presents an empirical study based on a survey of 399 owners of small and medium size companies in Lithuania. Applying bivariate and ordered probit estimators, we investigate why some business owners expect their firms to expand, while others do not. Our main findings provide evidence that SME owner's generic and specific human capital matter. Those with higher education and 'learning by doing' attributes, either through previous job experience or additional entrepreneurial experience, expect their businesses to expand. The expectations of growth are positively related to exporting and non-monotonically to enterprise size. In addition, we analyse the link between the perceptions of constraints to business activities and growth expectations and find that the factors, which are perceived as main business barriers, are not necessary those which are associated with reduced growth expectations. In particular, perceptions of both corruption and of inadequate tax systems seem to affect growth expectations the most.

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Aidis R, Mickiewicz T. Growth expectations of business owners: impact of human capital, firm characteristics and environmental transition. London (UK): University College London. 2005. (Economics working paper; 50).