The effects of entrepreneurial personality, background and network activities on venture growth*

Abstract

This study investigates the effects of entrepreneurial personality traits, background and networking activities on venture growth among 168 Chinese entrepreneurs in small and medium sized businesses in Singapore. Personality traits include need for achievement, internal locus of control, self-reliance and extroversion; background comprises education and experience; networking activities consist of size and frequency of communication networks. A structural equation modelling technique -partial least squares (PLS) -is used to estimate a path model with latent variables. The results indicate that experience, networking activities, and number of partners as well as internal locus of control and need for achievement all have positive impact on venture growth. Two other personality traits, self-reliance and extroversion have negative impact on number of partners and positive impact on networking activities, respectively. The impact of education on venture growth, however, is moderated by firm size, positive for larger firms and negative for smaller firms. Our findings indicate that among all the factors that we have considered, an entrepreneur's industrial and managerial experience is the dominating factor affecting venture growth.

Personality Traits of Entrepreneurs: A Review of Recent Literature

“…Rauch and Frese (2007b) find in their meta-analysis that an internal LOC has a significant correlation with business creation and eventual business success. Surveying 168 Chinese entrepreneurs in small and medium-sized enterprises in Singapore, Lee and Tsang (2001) find internal LOC positively correlates with venture size and growth rates. At the same time, Lee and Tsang (2001) note that personality traits are less important than industrial and managerial experience and skills in explaining firm growth in their sample.…”

Entrepreneurship and the process of firms' entry, survival and growth

“…Finally, from a managerial perspective, new founders who were previously employed as top managers in the same sector, who had better access to relevant information or had previous start-up experience (the so-called "sequential entrepreneurs") are expected to exhibit better post-entry business performance (for an empirical validation of these relationships, see Cooper, Gimeno-Gascon and Woo, 1994;Cressy, 1996;Arrighetti and Vivarelli, 1999;Bruderl and Preisendörfer, 2000;Lee and Tsang, 2001;Santarelli, 2006b; nature of innovation and the failure risk associated with innovative start-ups into account might be to consider unsuccessful innovative new firms; however, these are very difficult to observe since questionnaire analyses on early failed firms are virtually impossible to design and supply. 31 In more general terms, one can propose the hypothesis that innovation and entrepreneurship are strictly complementary; the other side of the coin being that R&D and innovation may have lower returns than expected just because of the lack of entrepreneurial skills (see Michelacci, 2003).…”

Allocation and productivity of time in new ventures of female and male entrepreneurs

“…Industry-specific knowledge has proven to be important for new venture performance (Lee and Tsang 2001), even in addition to work and entrepreneurial experience (van Praag 2003). Hypothesis 10 is formulated as follows:…”