Discovery behaviour and creation behaviour of Ethiopian entrepreneurs: the implications for the performance of their small tourism firms
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 4 September 2020
Issue publication date: 23 October 2020
Abstract
Purpose
The purpose of this study is to assess the effects of discovery and creation behaviour in opportunity identification on firm performance in a developing country context. By doing so, the study adds new knowledge and insights in researching the entrepreneurial behaviour types at the start-up phase and their eventual effects on firm performance.
Design/methodology/approach
The study was conducted amongst Ethiopian tour operators (n = 118), which are formally established small tourism firms. A survey questionnaire, which is the main data gathering tool in this study, was prepared based on a distinction between discovery and creation behaviour with regard to the seven entrepreneurial actions described by Alvarez and Barney (2007). Hence, 14 multiple-item measurement scales were derived to define the entrepreneurial behaviour types. Firm performance was measured using four indicators. A regression analysis was conducted to predict the effect of entrepreneurial behaviour at the start-up phase on firm performance.
Findings
The findings of this study provide consistent support for the hypothesis that tour-operating firms in Ethiopia founded through creation behaviour instead of discovery behaviour are performing better in terms of sales, employment, profit and asset size change.
Research limitations/implications
The theoretical contribution of this study is two-fold. First, it provides a scale for measuring the extent to which discovery and/or creation opportunity identification played a role in the start-up phase of the business. Second, the study assesses the effects of discovery behaviour and creation behaviour in opportunity identification on firm performance in a developing country context.
Originality/value
The entrepreneurs' behaviour through which they identify and pursue new opportunities may have a considerable effect on the subsequent performance of their newly established firms. It is, therefore, important to understand effects, which result from differences in entrepreneurs' behaviour at the start-up phase, in terms of outcomes such as firm performance among small businesses. Nonetheless, there is little empirical research conducted in this regard, particularly in the context of developing countries. This study contributes to the literature of entrepreneurship by applying entrepreneurial behaviour types, i.e. discovery and creation, as determinants of small firms' performance in a developing country context. Furthermore, it is one of the few studies concentrating on formal instead of informal operations in an African context.
Keywords
Acknowledgements
This study was part of the Ph.D. study of the corresponding author. The study was financed by NUFFIC, the Netherlands organisation for International Cooperation in Higher Education, through its STRONGBOW project (NICHE-ETH-023). The authors extend their gratitude to NUFFIC and the Center for International Cooperation of the Vrije Universiteit Amsterdam (CIS-VU). We are also thankful to Ethiopian tour operators who took part in this study. We are in particular indebted to Mr. Fitsum Gezahagn, the former president of ETOA, for his unreserved support during field work.
Citation
Eyana, S.M., Masurel, E. and Paas, L.J. (2020), "Discovery behaviour and creation behaviour of Ethiopian entrepreneurs: the implications for the performance of their small tourism firms", Journal of Small Business and Enterprise Development, Vol. 27 No. 6, pp. 865-883. https://doi.org/10.1108/JSBED-04-2019-0108
Publisher
:Emerald Publishing Limited
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