Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia
Employing the Bauer model, this paper presents the factors of risk preferences of small-scale manufacturing firm owners in the Tigray region, Ethiopia. Once we identify the determinants of risk preferences, we investigate the role of risk preferences on firm output disparities utilizing the Penrose...
Saved in:
| Main Authors: | , , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2025-12-01
|
| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2024.2445436 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1841550166019014656 |
|---|---|
| author | Samson Gebrerufael Getachew Kebede Daniel Hadera Guush Weldegbrial Selam Abraha |
| author_facet | Samson Gebrerufael Getachew Kebede Daniel Hadera Guush Weldegbrial Selam Abraha |
| author_sort | Samson Gebrerufael |
| collection | DOAJ |
| description | Employing the Bauer model, this paper presents the factors of risk preferences of small-scale manufacturing firm owners in the Tigray region, Ethiopia. Once we identify the determinants of risk preferences, we investigate the role of risk preferences on firm output disparities utilizing the Penrose growth/output disparity/model. The study uses primary data based on random survey of the small-scale manufacturing firm owners in the zonal towns of the Tigray region. The multinomial logit and the multiple linear regression models are employed to identify the estimates of the factors of the risk preferences and the output disparity. The risk preference category of each sample firm owner was captured by employing the paper-format implicit association test (IAT) contextualized for this study. As a factor of risk preference, we find the soft budget constraint is a statistically significant variable only for the risk-averse and the risk-neutral owners. The factor of the risk preference (good perception of risk faced) is a statistically significant variable only for the risk-lover owners. Unlike the controversial negative relationship between firm owner’s higher risk propensity and firm-level performances presented by some authors, this paper presents the normally expected positive relationship between the higher risk propensity and the output level. |
| format | Article |
| id | doaj-art-293621a25c11494a822578dedd4ad802 |
| institution | Kabale University |
| issn | 2332-2039 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj-art-293621a25c11494a822578dedd4ad8022025-01-10T06:53:32ZengTaylor & Francis GroupCogent Economics & Finance2332-20392025-12-0113110.1080/23322039.2024.2445436Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, EthiopiaSamson Gebrerufael0Getachew Kebede1Daniel Hadera2Guush Weldegbrial3Selam Abraha4Department of Economics, Aksum UniversityDepartment of Economics, Injibara UniversityDepartment of Management, Aksum UniversityDepartment of Marketing Management, Aksum UniversityDepartment of Economics, Aksum UniversityEmploying the Bauer model, this paper presents the factors of risk preferences of small-scale manufacturing firm owners in the Tigray region, Ethiopia. Once we identify the determinants of risk preferences, we investigate the role of risk preferences on firm output disparities utilizing the Penrose growth/output disparity/model. The study uses primary data based on random survey of the small-scale manufacturing firm owners in the zonal towns of the Tigray region. The multinomial logit and the multiple linear regression models are employed to identify the estimates of the factors of the risk preferences and the output disparity. The risk preference category of each sample firm owner was captured by employing the paper-format implicit association test (IAT) contextualized for this study. As a factor of risk preference, we find the soft budget constraint is a statistically significant variable only for the risk-averse and the risk-neutral owners. The factor of the risk preference (good perception of risk faced) is a statistically significant variable only for the risk-lover owners. Unlike the controversial negative relationship between firm owner’s higher risk propensity and firm-level performances presented by some authors, this paper presents the normally expected positive relationship between the higher risk propensity and the output level.https://www.tandfonline.com/doi/10.1080/23322039.2024.2445436Implicit association test (IAT)risk preferencegrowthR&Dcapitalsoft budget constraint |
| spellingShingle | Samson Gebrerufael Getachew Kebede Daniel Hadera Guush Weldegbrial Selam Abraha Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia Cogent Economics & Finance Implicit association test (IAT) risk preference growth R&D capital soft budget constraint |
| title | Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia |
| title_full | Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia |
| title_fullStr | Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia |
| title_full_unstemmed | Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia |
| title_short | Inquiry into firm owner’s risk preference and output disparity: evidence from the small-scale manufacturing firms in the Tigray region, Ethiopia |
| title_sort | inquiry into firm owner s risk preference and output disparity evidence from the small scale manufacturing firms in the tigray region ethiopia |
| topic | Implicit association test (IAT) risk preference growth R&D capital soft budget constraint |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2024.2445436 |
| work_keys_str_mv | AT samsongebrerufael inquiryintofirmownersriskpreferenceandoutputdisparityevidencefromthesmallscalemanufacturingfirmsinthetigrayregionethiopia AT getachewkebede inquiryintofirmownersriskpreferenceandoutputdisparityevidencefromthesmallscalemanufacturingfirmsinthetigrayregionethiopia AT danielhadera inquiryintofirmownersriskpreferenceandoutputdisparityevidencefromthesmallscalemanufacturingfirmsinthetigrayregionethiopia AT guushweldegbrial inquiryintofirmownersriskpreferenceandoutputdisparityevidencefromthesmallscalemanufacturingfirmsinthetigrayregionethiopia AT selamabraha inquiryintofirmownersriskpreferenceandoutputdisparityevidencefromthesmallscalemanufacturingfirmsinthetigrayregionethiopia |