A successful businessman is not a gambler. Risk attitude and business performance among small enterprises in Nigeria

This paper analyses the effect of risk attitudes of firm owners on business performance among small enterprises in Lagos, Nigeria. We find that there is no robust support for a positive effect of willingness to take risk through compensation for risk taking. Perception of risk does have a positive effect, suggesting that recognizing and cautiously dealing with risk is beneficial. The effect is robust under alternative specifications.

► We analyse the effect of risk attitudes of small enterprise owners on their performance in Nigeria.
► We measure performance by business revenue as profit is not a reliable measure in this context.
► We find that perception of risk has a robust positive effect on performance.
► The more conventional measure of willingness to take risk has no robust effect on performance.