Aspirations of Small-scale Entrepreneurs: Evidence from Urban Retailers in Indonesia

Patricio Dalton, Julius Rüschenpöhler, Bilal Zia

Research output: Working paperOther research output

Abstract

Small-scale entrepreneurs are ubiquitous in developing countries, yet very few graduate to become larger businesses. We ask whether such entrepreneurs even aspire to grow, and if so on which dimensions of the business? Among a representative sample of retail shop owners in Jakarta, we find 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, there is pronounced
heterogeneity with more than half the businesses reporting no aspirations for growth in the next 12 months, and 16 percent failing to imagine an ideal business over the long-term. We find that entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. We also show that aspirations
predict future-oriented behaviors such as savings, credit use, business expansion, and innovation, even after controlling for business practices. These results have important implications for the design and targeting of business growth programs and policies.
LanguageEnglish
Place of PublicationTilburg
PublisherTilburg University
Number of pages32
Publication statusPublished - Feb 2018

Publication series

NameDFID Working Paper

Fingerprint

Aspiration
Entrepreneurs
Retailers
Indonesia
Retail
Business practices
Developing countries
Employees
Business growth
Business reporting
Owners
Innovation
Targeting
Profit
Savings
Credit

Keywords

  • aspirations
  • micro-enterprises
  • innovation
  • small business growth
  • firm performance
  • technology adoption
  • self-efficacy
  • locus of control

Cite this

Dalton, P., Rüschenpöhler, J., & Zia, B. (2018). Aspirations of Small-scale Entrepreneurs: Evidence from Urban Retailers in Indonesia. (DFID Working Paper). Tilburg: Tilburg University.
Dalton, Patricio ; Rüschenpöhler, Julius ; Zia, Bilal. / Aspirations of Small-scale Entrepreneurs : Evidence from Urban Retailers in Indonesia. Tilburg : Tilburg University, 2018. (DFID Working Paper).
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Dalton, P, Rüschenpöhler, J & Zia, B 2018 'Aspirations of Small-scale Entrepreneurs: Evidence from Urban Retailers in Indonesia' DFID Working Paper, Tilburg University, Tilburg.

Aspirations of Small-scale Entrepreneurs : Evidence from Urban Retailers in Indonesia. / Dalton, Patricio; Rüschenpöhler, Julius; Zia, Bilal.

Tilburg : Tilburg University, 2018. (DFID Working Paper).

Research output: Working paperOther research output

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N2 - Small-scale entrepreneurs are ubiquitous in developing countries, yet very few graduate to become larger businesses. We ask whether such entrepreneurs even aspire to grow, and if so on which dimensions of the business? Among a representative sample of retail shop owners in Jakarta, we find 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, there is pronouncedheterogeneity with more than half the businesses reporting no aspirations for growth in the next 12 months, and 16 percent failing to imagine an ideal business over the long-term. We find that entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. We also show that aspirationspredict future-oriented behaviors such as savings, credit use, business expansion, and innovation, even after controlling for business practices. These results have important implications for the design and targeting of business growth programs and policies.

AB - Small-scale entrepreneurs are ubiquitous in developing countries, yet very few graduate to become larger businesses. We ask whether such entrepreneurs even aspire to grow, and if so on which dimensions of the business? Among a representative sample of retail shop owners in Jakarta, we find 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, there is pronouncedheterogeneity with more than half the businesses reporting no aspirations for growth in the next 12 months, and 16 percent failing to imagine an ideal business over the long-term. We find that entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. We also show that aspirationspredict future-oriented behaviors such as savings, credit use, business expansion, and innovation, even after controlling for business practices. These results have important implications for the design and targeting of business growth programs and policies.

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Dalton P, Rüschenpöhler J, Zia B. Aspirations of Small-scale Entrepreneurs: Evidence from Urban Retailers in Indonesia. Tilburg: Tilburg University. 2018 Feb. (DFID Working Paper).