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What are Entrepreneurs’ Objectives When Starting a New Business?

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  • Lionel Désiage

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 TEPP in its series TEPP Working Paper with number 2010-06.

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Date of creation: 2010
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Handle: RePEc:tep:teppwp:wp10-06

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  13. 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.
  14. David Dickinson & Ronald Oaxaca, 2005. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Working Papers 05-11, Department of Economics, Appalachian State University.
  15. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  16. David B. Audretsch, 2007. "Entrepreneurship capital and economic growth," Oxford Review of Economic Policy, Oxford University Press, vol. 23(1), pages 63-78, Spring.
  17. 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.
  18. 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.
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