The effect of parental transmission of entrepreneurship on small and micro-enterprise sales performance

Abstract

This article examines the role of parental transmission of entrepreneurship in the sales performance of small and micro-enterprises. We posit that while the intergenerational transmission of attitudes may be crucial for the entrepreneurial entry decision (as highlighted by the literature), cognitive elements and transmission of knowledge are more important for actual venture performance. Applying social cognitive theory (SCT), we leverage a large World Bank dataset to understand the drivers of small and micro-enterprise performance in the understudied developing economy context of Sri Lanka. The study illuminates how parental transmission is conditioned by cognitive skills. We also highlight that both the education and business-specific managerial experience of founders, as captured by firm age, may substitute for the parental transmission of business knowledge. The research offers theoretical and practical implications, interpreting the human capital drivers of small and micro-enterprise success through the lens of SCT and considering the complementary and compensatory influences on outcomes.