Sri Lankan Micro Businesses with and Without Employees: Exploring Human Capital, Perception and Business Characteristic Differences in Retail Shops
Conditions for Entrepreneurship in Sri Lanka: A Handbook (2011)
19 Pages Posted: 28 Oct 2016
Date Written: October 21, 2011
Micro enterprises stand for a large share of employment in many developing countries. This paper reports from a survey of 150 of small retail businesses in the Matara district in Sri Lanka to explore which factors are related to higher employment in these businesses. Differences in owner’s human capital, owner’s perceptions and business characteristics were tested between businesses with and without employees. The study identifies several characteristics related to firms having employees and provides empirical data on small firm development in a context that have been scarcely investigated in the literature. The findings indicate that both aspects of specific human capital and general human capital are important when exploring employment size differences. No statistical significant differences were detected with regard to business characteristics. A key finding is the importance of owners’ perceptions which may have implications for research and policy related to growth in micro businesses.
Keywords: Human capital, perceptions, business characteristics, retail shops, micro businesses, employment
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