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Article
Small- and Medium-Sized Businesses’’ Growth Expectations and Financial Performance in Latvia: Does Ethnicity Matter?
Journal of Baltic Studies (2011)
  • Ruta Aidis, George Mason University
  • Tomasz M Mickiewicz, University College London
  • Arnis Sauka
Abstract

Applying regulatory focus theory, this paper investigates the impact of both ‘initial confidence’ and ‘exactness of growth expectations’ on the financial performance of small and medium-sized firms in Latvia. Drawing on a data set based on repeated survey design, we explore the complexity of this relationship empirically. Our overall findings suggest that when controlling for other relevant factors, such as actual growth, entrepreneurs having higher growth expectations perform significantly better in terms of profitability. In addition, education has a strong modifying effect. The impact of high growth expectations on subsequent profit performance is stronger for entrepreneurs with a lower level of education. Moreover, these effects are amplified by ethnicity. They are much stronger for ethnic Russian entrepreneurs compared with ethnic Latvian entrepreneurs.

Keywords
  • Latvia,
  • minorities,
  • entrepreneurship,
  • optimism,
  • regulatory focus theory
Publication Date
2011
Citation Information
Ruta Aidis, Tomasz M Mickiewicz and Arnis Sauka. "Small- and Medium-Sized Businesses’’ Growth Expectations and Financial Performance in Latvia: Does Ethnicity Matter?" Journal of Baltic Studies Vol. 42 Iss. 3 (2011)
Available at: http://works.bepress.com/arnissauka/5/