Asset capitalisation and firm performance: a comparative study of self-employed vocational and non-vocational graduates in Arusha and Dar es salaam, Tanzania
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
JCBS
Abstract
Despite the importance of assets capitalisation, studies show doubts whether such capitalisation
contributes to business performance. This paper thus, determines the performance of businesses
owned by Vocational and non-Vocational graduates, compares performance in terms of revenue
and net worth, and determines the assets capitalization effect on revenue. The study adopted a
descriptive cross-sectional survey design and the sample size was 384 respondents. Descriptive
statistics, independent samples t-test and multiple linear regression were used to analyse data.
With descriptive statistics, results indicated that Vocational graduates' performance was
numerically higher than non-Vocational graduates. However, independent samples t-test results
indicated F (382) = 0.579, p = 0.563 and F (382) = 0.801, p = 0.422 for revenue and net worth
respectively, indicating insignificant difference in performance between the groups. The results
deviate from the Human Capital Theory, probably due to the facts that vocational graduates in
the country are said to be partially trained as compared with developed nations. Multiple linear
regression results indicate that property, plant and equipment (β = 0.500, p = 0.000), total
business' assets (β = 0.090, p = 0.046), years’ experience in business (β = 0.379, p = 0.000)
and education level of business owner (β = -0.065, p = 0.025) had a significant influence on
revenue. These findings help to conclude that there is no significant difference in performance
between Vocational and non-Vocational graduates. However, both groups were able to utilize
assets and their experience in business to generate more revenue, thus a need to extend the
Human Capital Theory to include tangible capital to fit the new context is inevitable. Therefore,
it is recommended that experience in business and investment in assets should be given priority
by policy makers and self-employed.
Description
Journal of Co-operative and Business Studies (JCBS),Vol.5, Issue 1
Keywords
Capitalisation, Business performance, Self-employment, Vocational, Non- Vocational graduates