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Do attitudes toward risk taking affect entrepreneurship? Evidence from second-generation Americans

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  • Areendam Chanda

    (Louisiana State University)

  • Bulent Unel

    (Louisiana State University)

Abstract

This paper empirically investigates the impact of willingness to take risks on entrepreneurship. We use a quarter century of data on second-generation Americans from Current Population Surveys in conjunction with a measure of willingness to take risks based on the Global Preference Survey. The level of risk taking in the country of origin is found to have a positive and significant impact on the likelihood of being an entrepreneur. A one-standard deviation increase in risk taking increases the probability of being an entrepreneur by 18%. We find that risk taking is also robust to other preference and cultural factors such as trust, patience, and individualism, as well as several deep-root determinants of development.

Suggested Citation

  • Areendam Chanda & Bulent Unel, 2021. "Do attitudes toward risk taking affect entrepreneurship? Evidence from second-generation Americans," Journal of Economic Growth, Springer, vol. 26(4), pages 385-413, December.
    • Handle: RePEc:kap:jecgro:v:26:y:2021:i:4:d:10.1007_s10887-021-09197-8
    DOI: 10.1007/s10887-021-09197-8
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    3. Tong Wang & Jiaxuan Liu & Hongyu Zhu & Yuansheng Jiang, 2024. "The Impact of Risk Aversion and Migrant Work Experience on Farmers’ Entrepreneurship: Evidence from China," Agriculture, MDPI, vol. 14(2), pages 1-20, January.
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    More about this item

    Keywords

    Entrepreneurship; Risk attitudes; Immigrants; Second-generation Americans; Preference measures; Occupational choice; Comparative development; Cultural transmission;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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