Growth expectations and financial performance of small businesses:evidence from Latvia


By applying regulatory focus theory, this paper investigates the impact of both initial confidence and of exactness of growth expectations on subsequent financial performance of the small firms. Drawing on the unique data set based on the repeated survey design, we make one of the first attempts to explore the complexity of this relationship empirically. Overall the findings suggest that controlling for other relevant factors, including actual growth, the entrepreneurs having higher growth expectations perform significantly better later on in terms of profitability. In addition, education has a strong modifying effect: the impact of high growth expectations on subsequent profit performance is stronger for entrepreneurs with lower level of education.

Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Last Modified: 29 Nov 2023 14:18
Date Deposited: 23 Apr 2013 09:12
Full Text Link: http://discover ... 462/1/17462.pdf
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PURE Output Type: Working paper
Published Date: 2008-01
Authors: Aidis, Ruta
Mickiewicz, Tomasz
Sauka, Arnis



Version: Accepted Version

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