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.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-078/3.
Date of creation: 02 Sep 2008
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Entrepreneurship; Satisfaction; Procedural Utility; Unemployment; Necessity Entrepreneurship;
Other versions of this item:
- Joern Block & Philipp Koellinger, 2009. "I Can't Get No Satisfaction-Necessity Entrepreneurship and Procedural Utility," Kyklos, Wiley Blackwell, vol. 62(2), pages 191-209, 04.
- 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 University Rotterdam.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-ENT-2008-09-20 (Entrepreneurship)
- NEP-HAP-2008-09-20 (Economics of Happiness)
- NEP-UPT-2008-09-20 (Utility Models & Prospect Theory)
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