WHAT DETERMINES ENTREPRENEURIAL SUCCESS? — A PSYCHOMETRIC STUDY OF RURAL ENTREPRENEURS IN INDIA

WHAT DETERMINES ENTREPRENEURIAL SUCCESS? — A PSYCHOMETRIC STUDY OF RURAL ENTREPRENEURS IN INDIA
2007 November-Viral Acharya, Abhilasha Rajan, Antoinette Schoar
Lead Center : Small Enterprise Finance Centre
Focus Area :SME Finance

We investigated what determines entrepreneurial success by studying the characteristics of rural kiosk operators in India, specifically kiosks run by Drishtee. We constructed a questionnaire to collect data on various psychological factors from existing kiosk operators in two states: Assam and Uttar Pradesh (UP). We related these factors and questions to performance measured by log sales of the kiosk. A significant degree of performance variation can be explained by psychological characteristics, in particular, self efficacy, achievement motivation and average psychological aptitude for entrepreneurs in Assam. However, performance variation of UP’s entrepreneurs is explained by age and prior experience in borrowing in addition to the psychological characteristic of achievement motivation. We identify specific questions as well and find that performance is significantly related to the questions relating to self-efficacy and locus of control for both states. Finally, we employ these findings to build a model for the selection strategy of rural entrepreneurs.


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We investigated what determines entrepreneurial success by studying the characteristics of rural kiosk operators in India, specifically kiosks run by Drishtee. We constructed a questionnaire to collect data on various psychological factors from existing kiosk operators in two states: Assam and Uttar Pradesh (UP). We related these factors and questions to performance measured by log sales of the kiosk. A significant degree of performance variation can be explained by psychological characteristics, in particular, self efficacy, achievement motivation and average psychological aptitude for entrepreneurs in Assam. However, performance variation of UP’s entrepreneurs is explained by age and prior experience in borrowing in addition to the psychological characteristic of achievement motivation. We identify specific questions as well and find that performance is significantly related to the questions relating to self-efficacy and locus of control for both states. Finally, we employ these findings to build a model for the selection strategy of rural entrepreneurs.