Home⇛Journal of Interdisciplinary Perspectives⇛vol. 2 no. 12 (2024)

Linking Entrepreneurial Competencies and Financial Risk: Pathways to Sustainable Business Growth

Donald Cyndyl L. Miguel | Rosalie C. Gemina

Discipline: business studies

 

Abstract:

This study explores the relationship between entrepreneurial skills and financial risk tolerance among ambulant vendors operating in informal economies. Focusing on key competencies such as self- competency, risk management, and control focus, the research aims to determine how these skills influence vendors’ willingness to engage in financial risks, a vital factor for business growth and sustainability. Data collected from 152 ambulant vendors in Agusan del Sur was analyzed using Pearson’s correlation and multiple regression. The results show a strong positive correlation between entrepreneurial skills and financial risk tolerance, with self-competency emerging as the most influential factor. With higher self- efficacy, entrepreneurs are more sure of handling financial uncertainty and grabbing chances. The study emphasizes acquiring entrepreneurial competencies to improve financial decision-making and corporate resilience. It also emphasizes the importance of focused training initiatives to improve these competencies, therefore providing information for stakeholders and legislators endorsing unofficial economies.



References:

  1. Ahmad, N. H., Halim, H. A., & Zainal, S. R. M. (2010). Is entrepreneurial competency the silver bullet for SME success in a developing nation? International Business Management, 4(2), 67-75. https://tinyurl.com/2v6smc6r
  2. Ayob, M., Pitchayady, M., & Hamid, S. A. (2019). Entrepreneurial self-efficacy, risk tolerance, and entrepreneurial intention: A cross-cultural study. Journal of Global Entrepreneurship Research, 9(2), 1-18. https://doi.org/10.1186/s40497-019-0164-4
  3. Baron, R. A., Franklin, R. J., & Hmieleski, K. M. (2016). Why entrepreneurs often experience low, not high, levels of stress: The joint effects of selection and psychological capital. Journal of Management, 42(3), 742-768. https://doi.org/10.1177/0149206313495411
  4. Boermans, M. A., & Willebrands, D. (2017). Entrepreneurship, risk perception, and firm performance. International Journal of Entrepreneurship and Small Business, 31(4), 557-569. https://doi.org/10.1504/IJESB.2017.083479
  5. Bryant, P. (2020). Self-efficacy and risk-taking in entrepreneurship: A multilevel analysis. Journal of Business Venturing, 35(3), 1-13. https://doi.org/10.1016/j.jbusvent.2020.105948
  6. Caliendo, M., Fossen, F. M., & Kritikos, A. S. (2015). Personality characteristics and the decision to become and stay self-employed. Small Business Economics, 45(4), 789-816. https://doi.org/10.1007/s11187-015-9652-5
  7. Farid, S., & El-Sayed, A. (2016). Entrepreneurial competencies and their impact on risk management: Evidence from emerging markets. Entrepreneurship Research Journal, 6(2), 215-229. https://doi.org/10.1515/erj-2015-0046
  8. Fisher, R., Maritz, A., & Lobo, A. (2020). Entrepreneurial hustle: Navigating uncertainty and enrolling venture stakeholders through urgent and unorthodox action. Journal of Management Studies, 57(5), 1002-1036. https://doi.org/10.1111/joms.12585
  9. Geri, S. (2013). Relationship between entrepreneurial skills and tendencies: A research on physical education students. International Journal of Business and Social Science, 4(5), 78-90. https://tinyurl.com/6j9xkzvk
  10. Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2007). Multivariate data analysis (6th ed.). Pearson Education.
  11. Hassan, M., & Wajdi, B. (2019). Entrepreneurial talent and financial risk tolerance: An empirical study. International Journal of Entrepreneurship, 23(2), 45-61. https://doi.org/10.2139/ssrn.3241254
  12. Kihlstrom, R. E., & Laffont, J. J. (2018). A general equilibrium entrepreneurial theory of firm formation based on risk aversion. Journal of Political Economy, 87(4), 719-748. https://www.jstor.org/stable/1831005
  13. Krueger, N. F., & Carsrud, A. L. (2014). Understanding the risk propensity of entrepreneurs: A meta-analysis. Journal of Business Venturing, 29(4), 406-427. https://doi.org/10.1016/j.jbusvent.2013.10.001
  14. Mamavi, O., Nagati, H., Pache, G., & Wehrle, F. T. (2015). How does performance history impact supplier selection in the public sector? Industrial Management & Data Systems, 115(1), 1-22. https://doi.org/10.1108/IMDS-02-2014-0047
  15. Neck, H. M., & Greene, P. G. (2011). Entrepreneurship education: Known worlds and new frontiers. Journal of Small Business Management, 49(1), 55-70. https://doi.org/10.1111/j.1540-627X.2010.00314.x
  16. Nguyen, N. P., Pham, M. H., & Nguyen, D. Q. (2023). Micro-entrepreneurs' risk management strategies: The mediating role of self-competence and financial literacy. Journal of Entrepreneurship and Small Business, 35(2), 123-135. https://doi.org/10.1504/IJESB.2023.109573
  17. Sabri, M. F. (2016). The relationship between financial literacy and financial resilience among small businesses. Journal of Financial Planning, 29(3), 62-72.
  18. Stuetzer, M., Obschonka, M., Davidsson, P., & Schmitt-Rodermund, E. (2016). Where do entrepreneurial skills come from? Journal of Business Venturing Insights, 5, 14-18. https://doi.org/10.1016/j.jbvi.2016.01.001
  19. Palich, L. E., & Bagby, D. R. (2020). Using cognitive theory to explain entrepreneurial risk-taking: Challenging conventional wisdom. Journal of Business Venturing, 10(6), 425-438. https://doi.org/10.1016/j.jbusvent.2020.05.001  
  20. Zheng, Y. (2013). The development of the risky financial behavior scale: A measure of financial risk tolerance. Journal of Financial Counseling and Planning, 24(2), 3-23. https://doi.org/10.1016/j.jfcp.2013.08.002

Tools


Copyright © 2024  KITE Digital Educational Solutions |  Exclusively distributed by CE-Logic