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Determinants of Performance in Microenterprises: Preliminary Evidence from Argentina

Authors


  • The first author is indebted to the Schneider-Electric Chair in Sustainability and Business Strategy as well to the Spanish Ministry of Economy and Competitiveness (ECO2012-33018) for providing financial support.

Address correspondence to: P. Berrone, Strategic Management, IESE Business School, Camino del Cerro del Aguila 3, 28023 Madrid, Spain. E-mail: pberrone@iese.edu.

Abstract

This paper proposes a theoretical multilevel framework that studies the determinants of microenterprises' performance. Using a unique data set of nearly 300 microenterprises located in Argentina, we find that human capital (proxied by educational level and degree of dedication), innovation, and intensity of use of own capital are important determinants of the microenterprise's performance. Moreover, we found that public policies give support primarily to microenterprises arising from unemployment. Additionally, these firms were found to be relatively less successful in terms of their performance, suggesting a pro-poor bias. Finally, we provide a taxonomy of microenterprises which distinguishes four different microentrepreneurial profiles.

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