Unformatted Attachment Preview
_______________________________________________________________
_______________________________________________________________
Report Information from ProQuest
February 19 2015 09:59
_______________________________________________________________
19 February 2015
ProQuest
Table of contents
1. The Performance of Female Entrepreneurs: Credit, Training and the Moderating Effect of Attitude
towards Risk-Taking........................................................................................................................................
1
Bibliography...................................................................................................................................................... 10
19 February 2015
ii
ProQuest
Document 1 of 1
The Performance of Female Entrepreneurs: Credit, Training and the Moderating Effect of Attitude
towards Risk-Taking
Author: Ekpe, Isidore; Razak, Razil Che; Mat, Norsiah Binti
ProQuest document link
Abstract: The objective of this study was to examine the moderating effect of attitude towards risk-taking on the
relationship between credit and training, and women entrepreneurs' performance. Entrepreneurship
performance is considered a vital link to an overall economic growth of a nation through its positive impact on
economic development in terms of job creation and innovations especially at the grassroots. However, despite
their crucial role in the economy, entrepreneurs especially women lack micro-finance services such as credit
and training for their businesses due to their low income, low educational attainment, societal discriminations
and lack of government's support, mostly in developing countries. Important as credit and training may be to
entrepreneurial performance, the attitude of the business entrepreneur towards risk-taking plays a vital role in
the utilization of the acquired resources for business performance. A quantitative research method (survey) was
used to solicit responses from women entrepreneurs in Nigeria. Data were analysed using descriptive statistics,
Pearson Correlation and hierarchical regression analyses. The results indicated that training had significant
influence on women entrepreneurs 'performance in Nigeria. Attitude towards risk-taking (ability to expand)
moderated the relationship between training and women entrepreneurs ' performance. [PUBLICATION
ABSTRACT]
Links: Find article in full-text
Full text: Headnote
The objective of this study was to examine the moderating effect of attitude towards risk-taking on the
relationship between credit and training, and women entrepreneurs' performance. Entrepreneurship
performance is considered a vital link to an overall economic growth of a nation through its positive impact on
economic development in terms of job creation and innovations especially at the grassroots. However, despite
their crucial role in the economy, entrepreneurs especially women lack micro-finance services such as credit
and training for their businesses due to their low income, low educational attainment, societal discriminations
and lack of government's support, mostly in developing countries. Important as credit and training may be to
entrepreneurial performance, the attitude of the business entrepreneur towards risk-taking plays a vital role in
the utilization of the acquired resources for business performance. A quantitative research method (survey) was
used to solicit responses from women entrepreneurs in Nigeria. Data were analysed using descriptive statistics,
Pearson Correlation and hierarchical regression analyses. The results indicated that training had significant
influence on women entrepreneurs 'performance in Nigeria. Attitude towards risk-taking (ability to expand)
moderated the relationship between training and women entrepreneurs ' performance.
Introduction
Women entrepreneurs face peculiar challenges in an attempt to achieve success (Hatcher, Teijesen and
Planck, 2007) and women entrepreneurs in less developed countries face much more barriers to formal
economic participation than those in advanced economies (Allen, Elam, Langowitz and Dean, 2008). Such
barriers include lack of education and training, limited access to capital and limited choice of industry. In Nigeria
especially, most women entrepreneurs do not have adequate formal education, basic literacy skills or training,
and market knowledge for successful business performance (Akanji, 2006; Ibru, 2009).
Limited education invariably provided limited social networks for women entrepreneurs in Nigeria. Availability of
social capital should have provided more access to information and resources for the women. It has been
19 February 2015
Page 1 of 10
ProQuest
observed that most women entrepreneurs in Nigeria possess primary and/or secondary school education; yet
skill training and tertiary education has positive relationship with women entrepreneurs' performance (Kuzilwa,
2005). Gender-related discriminations in the distribution of social wealth such as education and health could be
one of the causes of low education of women in Nigeria. This is the situation in most developing countries
(Porter and Nagarajan, 2005; Roomi and Parrot, 2008). Aside education and training, another critical issue to
women entrepreneurs in Nigeria is lack of business capital and credit. Competition from bigger firms and
unfavourable external business environment are also a cause of concern for women entrepreneurs in Nigeria
(Ojo, 2009; Iheduru, 2002). Lack of capital and credit due to lack of savings (occasioned by unemployment),
collaterals and family demands forces women entrepreneurs into less lucrative ventures such as retailing
(Akanji, 2006).
Credit and training are some of the micro-finance factors needed by women entrepreneurs, mostly in developing
countries, for enterprise performance. Micro-finance occupies a central position in the development of microenterprises in any economy; and it has received a world-wide acceptance as one of the leading strategies for
fighting poverty globally (Eversole, 2009) because its impact is much felt in the informal sector as a tool for
grassroots development (Morduch,1999; Roomi and Parrot, 2008; Rushad, 2004). Again, Carter and Shaw
(2006) stated that 70% of the world's poor are women and 88% of micro-finance institutions' clients are women;
hence the need for micro-finance to generate entrepreneurship and reduce poverty among women.
People, especially women, embark on entrepreneurial activity so as to tap opportunities in the market; and
mostly out of necessity in most developing economies. It is also to gain satisfaction as business owners, profit
to support families, and to produce goods and services to the society (Harrison and Mason, 2007). However;
Hatcher et al. (2007) had a contrary opinion to the issue of entrepreneurial activity as a necessity. To them,
women see their entrepreneurial activities as opportunities, rather than a necessity, which could be actualized
through micro-finance.
There is a growing recognition that entrepreneurship could significantly contribute to economic development of
women (Ibru, 2009) as well as improve the economies of developing countries. Thus, it is arguable that
promoting entrepreneurship among women is an effective way to revitalize an ailing economy. Among other
types of business venture, however, women enterprises are a leading sector in contributing to economic and
social development of poor women due to their distinct characteristics (Iheduru, 2002).
Despite the crucial role of women entrepreneurs in economic development of their families and their countries; it
is, however, discovered from the literature that women entrepreneurs do not have adequate credit and training
to pursue their business profits. This led to their low business performance than their male counterparts, for
example in UK and USA (Carter and Shaw, 2006), though they have significantly higher rates of informal
economic participation than their male counterparts (Allen et al., 2008).
Importance of credit and training aside; women entrepreneurs' ability to achieve good business performance
depends on their attitude towards risk-taking (Shane, 2003). Entrepreneurship theory (Shane, 2003) stated that
entrepreneur's ability to discover and exploit opportunity for entrepreneurial activity differs between individuals
and depends on individual's attitude towards risk-taking. For instance, a risk-averse individual is less likely to
exploit entrepreneurial opportunity (Shane, 2003). As such, a person may not search for or discover
entrepreneurial opportunity if he/she has a negative attitude towards risk-taking. In the same vein, an individual
may have an innovative business or service idea, and great likelihood to access micro-finance but may not
utilize such advantage if he/she fears risk. Behavioural theories such as the Theory of Planned Behaviour,
specifically the Intention Theory (Ajzen, 1991) concluded that attitude towards behaviour leads to intention
which eventually leads to actual behaviour. Other supporting behavioural theorists (e.g Crisp and Turner, 2007)
found that attitude and behavioural intention are positively related.
Many studies abound on micro-finance and women entrepreneurship growth, success and household income
(Akanji, 2006; Carter and Shaw, 2006; Eversole, 2009; Gatewood et al., 2004; Harrison and Mason, 2007; Ibru,
19 February 2015
Page 2 of 10
ProQuest
2009) but limited studies are available on the effect of credit and training on women entrepreneurs' performance
with attitude as a moderating variable. For example, Vob and Muller (2009) studied entrepreneurial attitude and
entrepreneurial behaviour. Though Ajzen (1991), Crisp and Turner (2007) measured attitude as a moderating
variable; however their study related to intention and self perception; not between micro-finance and
performance. Hence, there is the need for more research in this area, and this study provides such a research.
Therefore, the objective of this study is to examine the effect of credit and training on women entrepreneurs'
performance; moderated by attitude towards risk-taking.
Literature Review
Credit
Women entrepreneurs have limited physical, social and technological capital which forces them into microenterprises and the need for micro-finance (Brana, 2008; Carter and Shaw, 2006). Lack of these resources led
them to start under-funded enterprises which have negative impact on their business performance in the long
run (Brana, 2008; Gatewood, Brush, Carter, Green and Hart, 2004). Women's lack of capital at the start-up and
growth stages is due to low household income (Allen, 2000) and so they require start-up and working capital
from micro-finance institutions (Carter and Shaw, 2006). Women clients do not have physical capital as
collaterals demanded by conventional banks (I.F.C, 2007) but could use social capital demanded by microfinance institutions (Brau and Woller, 2004). Hence, they need credit for their businesses.
Credit or loan is very necessary for new and growing enterprises. Riding (2006) stated that higher percentage of
enterprises especially in Canada mostly seek external finance than use personal savings. Much dependence on
credit by entrepreneurs, especially women, is due to their inability to raise capital through personal savings
(Brana, 2008). The problem is much pronounced in developing countries due to unemployment and gender
discrimination in high-paid jobs (Brana, 2008; Carter and Shaw, 2006). However, Gatewood et al. (2004)
contended that women use more of personal savings than credit, to start and grow their enterprises. Salman
(2009) also argued that loan is not usually good for business start-up but for growing or existing enterprises due
to inability of the new business to pay back the loan at the initial business stage. While Kamani (2007)
contended that credit does not lead to women's improved welfare rather the government should create jobs for
the women. These arguments aside, numerous evidences abound in the literature that credit has positive
impact on enterprise performance. For instance, previous studies found that credit had positive impact on
enterprise profit in Nigeria, Canada, Nicaragua and Croatia respectively (Ojo, 2009; Wycklam and Wedley,
2003; Martin, 1999; I.F.A.D, 2006). We therefore hypothesize that:
HI: Credit is positively related to women entrepreneurs' performance.
Training
This is a vital micro-finance institutions' service. Education and/or training produce prior experience which leads
to preparedness for entrepreneurial activity (Shane, 2003). But women entrepreneurs, mostly in developing
countries, lack such prior business experience due to lack of former paid employment (Brana, 2008). Literature
asserted that women who were in paid employment were more likely to be engaged in entrepreneurships (Allen
et al; 2008; Carter and Shaw, 2006). However, unemployment in developing countries have hindered most
women from participating in paid employments; hence the need for the provision of training service to
entrepreneurs by micro-finance institutions. Women have less confidence, less entrepreneurial and
management skills (Brana, 2008) and so require training. It is also reported that few women have ever moved
their enterprise into formal sector due to inappropriate training (Braw and Woller, 2004). There is the need for
training because only few micro-finance institutions provide formal business training to their clients as they
assume that all clients are already entrepreneurs in business (Ibru, 2009). Arguing for the importance of training
as a non-credit aspect of micro-finance, Harrison and Mason (2007) advocated for training for women
entrepreneurs. Therefore, training is a vital micro-finance service required by women entrepreneurs especially
in developing economies. Training produces the required skill needed for business start-up or improvement
19 February 2015
Page 3 of 10
ProQuest
(Kickul et al., 2007; Kuzilwa, 2005) and women entrepreneurs need to possess adequate skills, acquired
through education and training, for entrepreneurial success (Reavley and Lituchy, 2008). Again, Robinson and
Malach (2004) emphasized the importance of practical business training and education in small businesses in
USA; while Ying (2008) emphasized entrepreneurial education to University students in Malaysia.
There are also suggestions from literature of the need to study credit jointly with training on entrepreneurship
performance (Ibru, 2009; Kuzilwa, 2005; Tazul, 2007) because women entrepreneurs in high-income countries
are better educated than those in low or middle income countries (Ibru, 2009); and skill training and tertiary
education may lead to business opportunities and impact on entrepreneurship (Gatewood et al., 2004).
Exploitation of entrepreneurial opportunity also depends on the entrepreneur's level of education, skills or
knowledge acquired through training, experience and social network (Shane, 2003). Training was found to have
positive impact on women's business growth in New Hampshire and Pennsylvania, U.S. A (Kickul et al., 2007),
on women's business success in Canada (Reavley and Lituchy, 2008) and in Haiti, Kenya, Malawi and Nigeria
(UNCDF/UNDP, 2003). We therefore hypothesize that:
H2: Training is positively related to women entrepreneurs' performance.
Attitude towards risk-taking
Attitude to risk used in this study is supported by the Entrepreneurship Theory of Shane (2003), and Intention
Theory of Ajzen (1991). For instance, Entrepreneurship Theory states that an entrepreneur's ability to identify
and tap the opportunity provided by the external environment (financial, economic, legal and socio-cultural) to
improve his/her business differs between individuals and depends on individual's willingness and ability to
engage in risky activity. The theory consists of opportunity discovery, evaluation of the opportunity and the
decision to exploit the opportunity. Others elements of the theory include entrepreneurship, business operation
and performance. The Theory of Planned behaviour of Ajzen (1991) also discussed entrepreneur's attitude.
Estates that behavioural intentions are the most vital determinants of behaviour; and that attitudes, subjective
norms, and perceived control converge to predict behavioural intentions. Attitude was defined as one's beliefs
about the consequences of performing the behaviour and one's evaluation of the possible consequences of
performing the behaviour. Crisp and Turner (2007) stated that attitude and behavioural intention are positively
related. Attitude towards the behaviour leads to intention which eventually leads to actual behaviour (Ajzen,
1991). We therefore hypothesize that:
H3: Attitude towards risk-taking moderates the effect of credit and training on women entrepreneurs'
performance.
Methodology
Survey Procedures
A quantitative research method (survey) was used to collect data from women entrepreneurs. A total of 280
questionnaires were distributed to the clients of three homogenous micro-finance banks in the north, east and
west regions of Nigeria. From the returned questionnaires, 161 were usable after data cleaning. Data were
analyzed using descriptive statistics (mean and standard deviation), correlation analysis and hierarchical
regression analysis.
Measures
In line with established literature, credit was measured in terms of loan size, use of loan and loan repayment
(e.g Kuzilwa, 2005; Lakwo, 2007; Peter, 2001). Training was measured in terms of skill acquisition and
management training (e.g Ibru, 2009; Kuzilwa, 2005). Attitude was measured in terms of willingness and ability
to engage in risky activity (e.g. Shane, 2003). While women entrepreneurs' performance was measured in terms
of net profit, output, investment and number of employees (e.g Kuzilwa, 2005; Reavley and Lituchy, 2008). All
the measures were tapped on a 7-point scale. The conceptual framework for this study is shown in Figure 1.
The moderator-interaction effects were determined in line with the procedure suggested by Baron and Kenny
(1986). A moderator-interaction effect would occur if a relation is substantially reduced instead of being
19 February 2015
Page 4 of 10
ProQuest
reversed (Baron and Kenny, 1986). Again, a moderator hypothesis is supported if the interaction or the product
of a predictor variable and the moderator is significant when the predictor and the moderator were being
controlled (Baron and Kenny, 1986).
Results
Data cleaning
The data used were free from errors. For instance, outliers were detected by comparing the Mahalanobis
distance (D2) or chi-square value of each respondent with the critical or table chi-square value, using the
number of predictor variables as the degrees of freedom, p 0.10, Variance Inflationary Factor