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What are Entrepreneurs' Objectives When Starting a New Business?

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  • Lionel Desiage

    (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV), TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV))

Abstract

This paper studies entrepreneurs' objectives when starting a business and the impact of entrepreneurial and firm characteristics on these objectives. Entrepreneurship involves two behaviors that lead to define two types of entrepreneurs: those who start businesses to create and secure their own jobs (protection motive) and those who want to develop their firms in terms of investment and personnel (developing motive). Individuals of the first group are defined as self-protectors and the second as developers. We show that the compositions of the self-protectors group and the developers group are very similar and differ only in a few characteristics. People with a low degree and low start-up capital are in a greater proportion among self-protectors. We use a French new entrepreneur survey and probit models to identify the determinants of choosing self-protection or development. We find that people who start firms to create their own jobs are those who are the most discriminated against on the labor market and those who have no entrepreneurial network. People with low start-up capital are more likely to become self-protector. Developers are those who have the possibility to be developers.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00809716.

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Date of creation: May 2010
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Handle: RePEc:hal:wpaper:halshs-00809716

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Keywords: entrepreneurship ; individual objectives ; entreprenarial behavior;

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  1. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
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  3. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
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  12. Simeon Djankov & Edward Miguel & Yingyi Qian & Gérard Roland & Ekaterina Zhuravskaya, 2005. "Who are Russia's Entrepreneurs?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 587-597, 04/05.
  13. Erik Stam & David Audretsch & Joris Meijaard, 2006. "Renascent Entrepreneurship - Entrepreneurial Preferences Subsequent to Firm Exit," Papers on Entrepreneurship, Growth and Public Policy 2006-06, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  14. David B. Audretsch, 2007. "Entrepreneurship capital and economic growth," Oxford Review of Economic Policy, Oxford University Press, vol. 23(1), pages 63-78, Spring.
  15. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  16. Markus Poschke, 2012. "Who Becomes an Entrepreneur? Labor Market Prospects and Occupational Choice," Cahiers de recherche 13-2012, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  17. Yannick L’Horty & Antoine Goujard & Emmanuel Duguet, 2008. "Les inégalités territoriales d'accès à l'emploi : une exploration à partir de sources administratives exhaustives," Économie et Statistique, Programme National Persée, vol. 415(1), pages 17-44.
  18. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
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