Resilience in under-represented entrepreneurs and their businesses
Maria Wishart Maria.Wishart@wbs.ac.uk
Stephen Roper Stephen.Roper@wbs.ac.uk
Halima Jibril Halima.Jibril@wbs.ac.uk
Resilience in under-represented
entrepreneurs and their
14 November 2019
Small businesses that are led by entrepreneurs from under-
represented groups experience lower turnover and higher
failure rates than their counterparts (ERC, 2018)
Ethnic-led small businesses in London are 15% more likely to
have experienced a crisis than non-ethnic-led (Wishart, Roper
and Hart, 2018)
What is the relationship between an SME leader’s resilience and that
of their firm?
How does this vary in firms led by under-represented groups (ethnic
1. Resilience research in an SME context
• Link between leader resilience and firm performance (Ayala &
Manzano, 2014; Fisher et al, 2016)
• Firm resilience linked to social capital (Baron & Markman,
2000) strategic diversity (Conz et al, 2015) and
resourcefulness (Powell & Baker, 2011) of leader
• SME characteristics influence firm resilience, e.g., age of firm
(Herbane, 2015), size of firm (Hammock, 2015), ownership of
premises (Dahlhamer & Tierney, 1998), sector (Jaaron &
Backhouse, 2014) & location (Doern et al, 2016)
• No studies that overtly link individual and firm resilience: lack
of agreed measure for firm resilience
2. Manager characteristics & firm risk management practices
• Optimistic CEOs make different financial decisions (Graham et
al, 2013); overconfidence impacts negatively on investment
decisions, amplified in men (Barber & Odean, 2001)
• Married managers more risk averse (Roussanov & Savor,
• Religion influences risk appetite of leaders (Noussair et al,
• Age and educational attainment of leaders are correlated with
firms’ policies (Bertrand & Schoar, 2003)
• Cross-country differences in risk attitude observed (Ferreira,
H1: The individual resilience level of a small business leader will predict
the likelihood of their firm to plan for adversity.
H2: The effect of individual resilience on planning for adversity is higher
H3: The effect of individual resilience on planning for adversity is higher
for ethnic minority individuals.
H4: The effect of individual resilience on planning for adversity varies
with national context i.e. country.
H5: The effect of individual resilience on planning for adversity varies
with geographical location i.e. low income or medium income area.
Data and methods
• Data set of 901 small businesses with between 3 and 99 employees, 516
based in London, 385 based in Frankfurt.
• Information on firm level characteristics and strategies, and individual
characteristic of the business leaders, including resilience score
• Dependent variable: Presence of resilience planning - indicator variable
equal to one if the business has a formal strategy for dealing with
adversity, and zero otherwise.
• Main independent variable: Individual leader resilience - Connor-
Davidson Resilience Scale (CD10), a ten-item measure of individual
resilience, gives a score of 0 to 40.
• Control variables: individual and firm level factors that might influence the
probability that a business has formal plans for dealing with adversity
We estimate the following Probit model for business resilience
𝑌𝑖 = 𝛽0 + 𝛽1 𝐶𝐷10𝑖 + 𝛽2 𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠𝑖 + 𝜀𝑖 … … . . (1)
• where 𝑌𝑖 is a dummy variable equal to 1 if a business has formal
procedures for planning for adversity, and zero otherwise.
• 𝐶𝐷10 is the Connor-Davidson 10-point scale that captures the
resilience of individual business leaders,
• 𝐶𝑜𝑛𝑡𝑟𝑜𝑙𝑠 is a vector of leader-specific and business-specific control
• We apply sampling weights to improve representativeness
Results - moderating effects
(main coefficients of interest)
CD10-female 0.021 CD10-female 0.005
CD10-male 0.008 CD10-male 0.004
CD10-ethnic 0.003 CD10-ethnic 0.013
CD10-nonethnic 0.019 CD10-non ethnic 0.001
Summary of results
H1: The individual resilience level of a small business leader will predict the likelihood
of their firm to plan for adversity. LONDON FRANKFURT
H2: The effect of individual resilience on planning for adversity is higher for females.
H3: The effect of individual resilience on planning for adversity is higher for ethnic
minority individuals. LONDON FRANKFURT
H4: The effect of individual resilience on planning for adversity varies with national
context i.e. country. SUPPORTED
H5: The effect of individual resilience on planning for adversity varies with
geographical location i.e. low income or medium income area. LONDON FRANKFURT
Significant relationship between CD10 and resilience
planning in London but not Frankfurt.
Differences between 2 cities – further research required:
are regulatory or cultural factors at work here?
Gender makes a difference but ethnicity does not –
distinctiveness of these two under represented groups