I Can't Get No Satisfaction-Necessity Entrepreneurship and Procedural Utility
AbstractWe study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their self-reported satisfaction regarding their start-up. Our study identifies a new facet of procedural utility and offers new insights about the motivations and goals of nascent entrepreneurs. Most importantly, we identify a group of nascent entrepreneurs that 'cannot get satisfaction' with their start-up-not because their start-up fails to deliver financial returns, but because they did not choose to become entrepreneurs in the first place. This group of unsatisfied entrepreneurs includes individuals starting a business after a period of long-term unemployment and those individuals with a lack of better employment alternatives (necessity entrepreneurs). In addition, we provide additional evidence for the importance of both financial and non-financial incentives of entrepreneurs. While financial success is the most important determinant of start-up satisfaction, achievement of independence and creativity is also highly important. Our results emphasize the relevance of procedural utility for understanding economic behavior. We show that the process leading to a decision has an impact on the later satisfaction with the outcome of that decision. Copyright 2009 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Kyklos.
Volume (Year): 62 (2009)
Issue (Month): 2 (04)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962
Other versions of this item:
- Block, J.H. & Koellinger, Ph.D., 2008. "I Can’t Get No Satisfaction - Necessity Entrepreneurship and Procedural Utility," ERIM Report Series Research in Management ERS-2008-051-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Joern Block & Philipp Koellinger, 2008. "I can't get no Satisfaction - Necessity Entrepreneurship and Procedural Utility," Tinbergen Institute Discussion Papers 08-078/3, Tinbergen Institute.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
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