Micro-family-owned business : transitory survival mechanism or long term wealth creator?

Principal Topic: Entrepreneurship is key to employment, innovation and growth (Acs & Mueller, 2008), and as such, has been the subject of tremendous research in both the economic and management literatures since Solow (1957), Schumpeter (1934, 1943), and Penrose (1959). The presence of entrepreneurs in the economy is a key factor in the success or failure of countries to grow (Audretsch and Thurik, 2001; Dejardin, 2001). Further studies focus on the conditions of existence of entrepreneurship, influential factors invoked are historical, cultural, social, institutional, or purely economic (North, 1997; Thurik 1996 & 1999). Of particular interest, beyond the reasons behind the existence of entrepreneurship, are entrepreneurial survival and good ''performance'' factors. Using cross-country firm data analysis, La Porta & Schleifer (2008) confirm that informal micro-businesses provide on average half of all economic activity in developing countries. They find that these are utterly unproductive compared to formal firms, and conclude that the informal sector serves as a social security net ''keep[ing] millions of people alive, but disappearing over time'' (abstract). Robison (1986), Hill (1996, 1997) posit that the Indonesian government under Suharto always pointed to the lack of indigenous entrepreneurship , thereby motivating the nationalisation of all industries. Furthermore, the same literature also points to the fact that small businesses were mostly left out of development programmes because they were supposed less productive and having less productivity potential than larger ones. Vial (2008) challenges this view and shows that small firms represent about 70% of firms, 12% of total output, but contribute to 25% of total factor productivity growth on average over the period 1975-94 in the industrial sector (Table 10, p.316). ---------- Methodology/Key Propositions: A review of the empirical literature points at several under-researched questions. Firstly, we assess whether there is, evidence of small family-business entrepreneurship in Indonesia. Secondly, we examine and present the characteristics of these enterprises, along with the size of the sector, and its dynamics. Thirdly, we study whether these enterprises underperform compared to the larger scale industrial sector, as it is suggested in the literature. We reconsider performance measurements for micro-family owned businesses. We suggest that, beside productivity measures, performance could be appraised by both the survival probability of the firm, and by the amount of household assets formation. We compare micro-family-owned and larger industrial firms' survival probabilities after the 1997 crisis, their capital productivity, then compare household assets of families involved in business with those who do not. Finally, we examine human and social capital as moderators of enterprises' performance. In particular, we assess whether a higher level of education and community participation have an effect on the likelihood of running a family business, and whether it has an impact on households' assets level. We use the IFLS database compiled and published by RAND Corporation. The data is a rich community, households, and individuals panel dataset in four waves: 1993, 1997, 2000, 2007. We now focus on the waves 1997 and 2000 in order to investigate entrepreneurship behaviours in turbulent times, i.e. the 1997 Asian crisis. We use aggregate individual data, and focus on households data in order to study micro-family-owned businesses. IFLS data covers roughly 7,600 households in 1997 and over 10,000 households in 2000, with about 95% of 1997 households re-interviewed in 2000. Households were interviewed in 13 of the 27 provinces as defined before 2001. Those 13 provinces were targeted because accounting for 83% of the population. A full description of the data is provided in Frankenberg and Thomas (2000), and Strauss et alii (2004). We deflate all monetary values in Rupiah with the World Development Indicators Consumer Price Index base 100 in 2000. ---------- Results and Implications: We find that in Indonesia, entrepreneurship is widespread and two thirds of households hold one or several family businesses. In rural areas, in 2000, 75% of households run one or several businesses. The proportion of households holding both a farm and a non farm business is higher in rural areas, underlining the reliance of rural households on self-employment, especially after the crisis. Those businesses come in various sizes from very small to larger ones. The median business production value represents less than the annual national minimum wage. Figures show that at least 75% of farm businesses produce less than the annual minimum wage, with non farm businesses being more numerous to produce the minimum wage. However, this is only one part of the story, as production is not the only ''output'' or effect of the business. We show that the survival rate of those businesses ranks between 70 and 82% after the 1997 crisis, which contrasts with the 67% survival rate for the formal industrial sector (Ter Wengel & Rodriguez, 2006). Micro Family Owned Businesses might be relatively small in terms of production, they also provide stability in times of crisis. For those businesses that provide business assets figures, we show that capital productivity is fairly high, with rates that are ten times higher for non farm businesses. Results show that households running a business have larger family assets, and households are better off in urban areas. We run a panel logit model in order to test the effect of human and social capital on the existence of businesses among households. We find that non farm businesses are more likely to appear in households with higher human and social capital situated in urban areas. Farm businesses are more likely to appear in lower human capital and rural contexts, while still being supported by community participation. The estimation of our panel data model confirm that households are more likely to have higher family assets if situated in urban area, the higher the education level, the larger the assets, and running a business increase the likelihood of having larger assets. This is especially true for non farm businesses that have a clearly larger and more significant effect on assets than farm businesses. Finally, social capital in the form of community participation also has a positive effect on assets. Those results confirm the existence of a strong entrepreneurship culture among Indonesian households. Investigating survival rates also shows that those businesses are quite stable, even in the face of a violent crisis such as the 1997 one, and as a result, can provide a safety net. Finally, considering household assets - the returns of business to the household, rather than profit or productivity - the returns of business to itself, shows that households running a business are better off. While we demonstrate that uman and social capital are key to business existence, survival and performance, those results open avenues for further research regarding the factors that could hamper growth of those businesses in terms of output and employment.

A phylogenetic analysis and taxonomic revision of the oribatid mite family Malaconothridae (Acari: Oribatida), with new species of Tyrphonothrus and Malaconothrus from Australia

Hitherto, the Malaconothridae contained Malaconothrus Berlese, 1904 and Trimalaconothrus Berlese, 1916, defined by the possession of one pre-tarsal claw (monodactyly) or by three claws (tridactyly) respectively. However, monodactyly is a convergent apomorphy within the Oribatida and an unreliable character for a classification. Therefore we undertook a phylogenetic analysis of 102 species as the basis for a taxonomic review of the Malaconothridae. We identified two major clades, equivalent to the genera Tyrphonothrus Knülle, 1957 and Malaconothrus. These genera are redefined. Trimala-conothrus becomes the junior subjective synonym of Malaconothrus. Some 42 species of Trimalaconothrus are recom-bined to Malaconothrus and 15 species to Tyrphonothrus. Homonyms created by the recombinations are rectified. The replacement name M. hammerae nom. nov. is proposed for M. angulatus Hammer, 1958, the junior homonym of M. an-gulatus (Willmann, 1931) and the replacement name M. luxtoni nom. nov. is proposed for M. scutatus Luxton, 1987, the junior homonym of M. scutatus Mihelč ič, 1959. Trimalaconothrus iteratus Subías, 2004 is an unnecessary replacement name and is a junior objective synonym of Malaconothrus longirostrum (Hammer 1966). Malaconothrus praeoccupatus Subías, 2004 is a junior objective synonym of M. machadoi Balogh & Mahunka, 1969. Malaconothrus obsessus (Subías, 2004), an unnecessary replacement name for Trimalaconothrus albulus Hammer 1966 sensu Tseng 1982, becomes an available name for what is in fact a previously-undescribed species of Malaconothrus. We describe four new species of Tyrphonothrus: T. gnammaensis sp. nov. from Western Australia, T. gringai sp. nov. and T. maritimus sp. nov. from New South Wales, and T. taylori sp. nov. from Queensland. We describe six new species of Malaconothrus: M. beecroftensis sp. nov., M. darwini sp. nov. M. gundungurra sp. nov. and M. knuellei sp. nov. from New South Wales, M. jowettae sp. nov. from Norfolk Island, and M. talaitae sp. nov. from Victoria.

Albert Namatjira: copyright estates and traditional knowledge

Albert Namatjira was Australia's first Indigenous professional artist. He adapted Western-style painting to express his cultural knowledge of the Arrernte country, for which he was a traditional custodian. In his lifetime, Albert Namatjira achieved great acclaim for his exceptional ability as an artist. However, after his untimely death, he was ignored by the mainstream Australian art world, because of the aesthetic prejudices and social policies of the time. A recent exhibition entitled Seeing the Centre: The art of Albert Namatjira (1902-1959) curated by Alison French has sought to redress this neglect, and provide a retrospective of his work. The exhibition has brought to light that the copyright in the artistic works of Albert Namatjira has not been passed onto his family descendants. In June 1957, Namatjira entered into a copyright agreement with John Brackenreg, the owner of a publishing company by the name of Legend Press, and the associated Artarmon Galleries in Sydney. It was agreed that Legend Press would pay royalties to Namatjira for the sole right to reproduce all of his paintings. Following Namatjira's death in 1959, the administration of his estate passed to the Public Trustee for the Northern Territory Government. The Public Trustee of the Northern Territory Government authorised the sale of Namatjira's copyright to Legend Press in 1983, thereby ending the ability of the descendents of Namatjira to benefit from on-going income from the reproduction of his works. Senator Aden Ridgeway of the Democrats has called on the Federal Government to enter into discussions with the Northern Territory Government to buy back the copyright in Albert Namatjira's works. He argued that exclusive control of the use and reproduction of his works should be restored to his descendants, as well as the receipt of all financial benefits that result from the use and reproduction of his works under copyright protection. The Senator said: 'By doing this, we will all be rewarded, because finally, belatedly, we will be showing Albert Namatjira the reverence that he has always deserved. We will be protecting his legacy for future generations'.