Abstract

We survey 612 entrepreneurs who are members of microcredit programs across three developing countries to examine the determinants of firm employment. We find that for opportunity-motivated entrepreneurs, a greater number of employees are predicted by pre-entry means (managerial skill, pre-planning, and business expertise) with these relationships mediated by differentiation-related innovation. We find that necessity-motivated entrepreneurs do not seek innovation as a means to growth. Rather their efforts to increase firm employment are enhanced by a set of learned repertoires which we identify as resourcefulness. Specifically, we find behavioral resourcefulness and social resourcefulness increased the likelihood of higher firm employment for necessity-motivated entrepreneurs while financial resourcefulness was not significant.

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