The Effect of Virtuous and Entrepreneurial Orientations on Microfinance Lending and Repayment: A Signaling Theory Perspective

26 Pages Posted: 6 Jan 2015

See all articles by Todd W. Moss

Todd W. Moss

Texas Tech University

Donald O. Neubaum

Oregon State University

Moriah Meyskens

University of San Diego

Date Written: January 2015

Abstract

The availability of capital for microenterprises has grown rapidly due to microfinancing platforms such as Kiva. The investment decisions of microlenders are challenged due to the limited information about the microenterprises' characteristics and behavioral intentions. Extending signaling theory, we suggest that microenterprises' narratives on microfinancing platforms are an important means to signal valuable characteristics and behavioral intentions to prospective lenders. Results indicate that microenterprises, which signal autonomy, competitive aggressiveness, and riskÔÇÉtaking, are more likely to receive funding, and to receive it more quickly. Microenterprises that signal conscientiousness, courage, empathy, and warmth are less likely to get funded. Rhetorical signaling proactiveness, conscientiousness, courage, warmth, or zeal is negatively associated with loan repayment.

Suggested Citation

Moss, Todd W. and Neubaum, Donald O. and Meyskens, Moriah, The Effect of Virtuous and Entrepreneurial Orientations on Microfinance Lending and Repayment: A Signaling Theory Perspective (January 2015). Entrepreneurship Theory and Practice, Vol. 39, Issue 1, pp. 27-52, 2015. Available at SSRN: https://ssrn.com/abstract=2545629 or http://dx.doi.org/10.1111/etap.12110

Todd W. Moss (Contact Author)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Donald O. Neubaum

Oregon State University ( email )

Bexell Hall 200
Corvallis, OR 97331
United States

Moriah Meyskens

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

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