Title: Human capital, financial strategy and small firm performance: a study of Canadian entrepreneurs

Authors: Amarjit Gill; Călin Gurău; Leo-Paul Dana; Carlos Raúl Sánchez

Addresses: Edwards School of Business, University of Saskatchewan, 25 Campus Drive, Saskatoon, Saskatchewan, S7N 5A7, Canada ' Montpellier Business School, Montpellier Research in Management, 2300 Avenue des Moulins, 34185 Montpellier, France ' Montpellier Business School, Montpellier Research in Management, 2300 Avenue des Moulins, 34185 Montpellier, France ' Montpellier Business School, Montpellier Research in Management, 2300 Avenue des Moulins, 34185 Montpellier, France

Abstract: This study investigates the relationship between human capital, financial strategy, and small firm performance in Canadian firms, analysing primary data collected through telephone surveys from 187 start-up owners. The results show that bank connections, entrepreneurial experience, internal financing sources, and investment motivations are positively correlated with the performance of small ventures; bank connections, entrepreneurial experience, personal financial sources, and risk diversification have a positive correlation with the net profit margin; while bank connections and the financial investment of immediate family members show a positive correlation with both return on investment and cash flow. The study enriches the literature concerning the factors affecting small firms' performance, exploring, both synthetically and analytically, the complex relationships between human, social and financial capital.

Keywords: human capital; financial sources; financial strategy; small firm performance; Canadian firms.

DOI: 10.1504/IJESB.2017.085428

International Journal of Entrepreneurship and Small Business, 2017 Vol.31 No.4, pp.492 - 513

Received: 10 Feb 2016
Accepted: 07 Apr 2016
Published online: 26 Jul 2017 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article