Page 74 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

Entrepreneurship and Small Business Growth 63

diploma recipients per 1,000 residents, real wages, share of nonfarm pro-
prietors’ income, density of urban establishments, urban jobs per 1,000 res-
idents, and region of the country.
Profitability of rural small businesses was related to number of firm births
adjusted for population, real farm proprietors’ income, per capita income, av-
erage urban nonfarm proprietors’ income, real wages in urban areas, real
Gross State Product, and two regional variables (Great Lakes and Southeast).

Papadaki and Chami
A somewhat related study of determinants of microbusiness growth pat-
terns in Canada, using Micro-Enterprises 2000 Survey data, examined
owner-founders of microbusinesses involving females, people employed in
agriculture, and Hispanics in seven nonmanufacturing industries with be-
tween one and four employees in 1995 and still operating in 1999 (Pa-
padaki and Chami 2002). The study divides determinants of business
growth into three main factors: (1) owner-manager characteristics, (2)
growth motivation, and (3) management know-how.
Several results have implications for the present study even though the
Canadian study is a microstudy of businesses rather than a county-level
analysis. Businesses whose owners had not completed high school reported
slower growth. Gender, age, and immigrant status of owners did not affect
business growth significantly.
Propensity of an owner to take risks was significantly related to growth,
while the rate of growth in the businesses was less when the owner was cur-
rently employed outside of the business venture. This situation may reflect
a lifestyle entrepreneur status and a relative shortage of time to devote to
the business venture. Expressed desire or commitment to being one’s own
boss did not seem related to rate of growth.
Significant variables in the management know-how category included
use of informal networks and the fact that the business venture was co-
owned with a partner. The partnership relationship was important in busi-
ness formation or later stages. Willingness of a business owner to share con-
trol and incorporate the specific talents and abilities of the partner may be
especially important in small business success.
A business having been started by a family member or the owner having
previous experience with the business was not associated with growth. Also
surprising was that neither previous ownership nor prior involvement with
a business of the same type was associated with business growth.

Christofides, Behr, and Neelakantan
The importance of creating an entrepreneurial climate including the
role of public agencies has been discussed extensively in the academic and