Underdog entrepreneurship: a model to predict the success of poor entrepreneurs
Journal of Entrepreneurship in Emerging Economies
ISSN: 2053-4604
Article publication date: 12 February 2024
Abstract
Purpose
While extensive research exists on how positive life circumstances and positive personality traits promote entrepreneurship, there is little research focusing on how negative personal circumstances may potentially breed entrepreneurship. This study aims to build upon the theory of underdog entrepreneurship to examine the effect of challenging life circumstances such as poverty on the development of entrepreneurial traits in underdog entrepreneurs. This research analyzed the effect of risk-taking (RT) on the entrepreneurial success (ES) of underdog entrepreneurs and the role of optimism (OPM) and persistence (P) as mediating variables and poverty as a moderator variable.
Design/methodology/approach
A cross-sectional survey was conducted to collect data from 400 micro-finance borrowers of Akhuwat Foundation Pakistan. Akhuwat provides interest-free small loans to the poor segment of society. Preliminary testing of the survey questionnaire with a sample of 35 borrowers of Akhuwat Foundation in Lahore city was conducted before data collection. Data was collected from four randomly selected branches in Lahore city.
Findings
The authors found that OPM and P significantly mediate the relationship between RT and ES. In addition, the authors analyzed the moderating effect of poverty on the relationship between OPM and ES and found a negative moderating effect. A strong positive moderating effect of poverty was found on the relationship between P and ES. The results of multi-group analysis show that successful and unsuccessful underdog entrepreneurs differ in their RT propensity, which is significantly mediated by OPM and P.
Originality/value
This study provides empirical evidence on entrepreneurial traits and success of poor entrepreneur in an emerging economy. This work is original and has not been submitted elsewhere.
Keywords
Acknowledgements
The authors would like to acknowledge the sincere advice and help of Dr Naved Hamid in improving their sample selection and grouping criteria. Author has been very kind in giving his ample time and thought provoking discussion sessions.
Funding source: The data collection of this research was funded by Lahore School of Economics, Pakistan.
Conflict of interest statement: “On behalf of all authors, the submitting author declares no conflict of interest in this paper.”
Citation
Sajjad, A. and Talat, A. (2024), "Underdog entrepreneurship: a model to predict the success of poor entrepreneurs", Journal of Entrepreneurship in Emerging Economies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JEEE-07-2023-0262
Publisher
:Emerald Publishing Limited
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