Investment risk preference among Greek SME proprietors: a pilot study

Current research in the area of risk management within small and medium-sized enterprises (SMEs) appears predisposed towards risk, predominantly dealing with the willingness of SMEs to take on losses. However, in this pilot study, the authors aim to focus on a different aspect of risk management in SMEs, namely the risk preferences. Risk preferences in this case are regarded as the willingness of SME proprietors to take on risks that are likely to lead to investment gains.

Data is gathered via a combination of a survey questionnaire and a probability scenario toolset. The authors sampled a total of 150 SME proprietors operating in Greece. The data was analysed using a combination of regression models and binomial tests.

The results suggest that we cannot, as previous literature suggests, conclude that SME proprietors generally exhibit a negative risk preference.

In light of Greece's recent economic difficulty, and in acknowledgement of the critical role played by SMEs in the Greek economy, this study addresses a topical subject in entrepreneurship research: what are the factors determining investment risk preferences?