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Is Entrepreneurial Success Predictable? An Ex‐Ante Analysis of the Character‐Based Approach

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  • Marco Caliendo
  • Alexander S. Kritikos

Abstract

This paper empirically analyzes whether the character‐based approach, which focuses on the personality structure and the human capital of business founders, allows prediction of entrepreneurial success. A unique data set is used consisting of 414 persons whose personal characteristics were analyzed by different methods, namely an one‐day assessment center (AC) and a standardized questionnaire, before they launched their business. Results are partly unexpected and weaker than previous ex‐post findings: first, we found correlations between the AC data and the questionnaire in one subgroup only. Second, the predictive power of the AC data is slightly better than that of the questionnaire, but lower than expected in theory. Interestingly, for those subgroups where the AC data have low predictive power, the questionnaire does better. Third, when success is measured in terms of employees hired, the character‐based approach is a poor predictor.

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  • Marco Caliendo & Alexander S. Kritikos, 2008. "Is Entrepreneurial Success Predictable? An Ex‐Ante Analysis of the Character‐Based Approach," Kyklos, Wiley Blackwell, vol. 61(2), pages 189-214, May.
  • Handle: RePEc:bla:kyklos:v:61:y:2008:i:2:p:189-214
    DOI: 10.1111/j.1467-6435.2008.00398.x
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    2. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2014. "Personality characteristics and the decisions to become and stay self-employed," Small Business Economics, Springer, vol. 42(4), pages 787-814, April.
    3. Mateusz Piwowarski & Danuta Miłaszewicz & Małgorzata Łatuszyńska & Kesra Nermend, 2019. "Multi-Criteria Assessment of the Company's Location Selection: A Dynamic Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 215-230.
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    5. Willebrands, Daan & Lammers, Judith & Hartog, Joop, 2012. "A successful businessman is not a gambler. Risk attitude and business performance among small enterprises in Nigeria," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 342-354.
    6. Joyce Koe Hwee Nga & Gomathi Shamuganathan, 2010. "The Influence of Personality Traits and Demographic Factors on Social Entrepreneurship Start Up Intentions," Journal of Business Ethics, Springer, vol. 95(2), pages 259-282, August.
    7. Martin Koning & Marie-Estelle Binet & François Facchini, 2010. "Les déterminants de la dynamique entrepreneuriale dans les régions françaises (1994-2003)," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00467900, HAL.
    8. Caliendo, Marco & Fossen, Frank & Kritikos, Alexander, 2012. "Trust, positive reciprocity, and negative reciprocity: Do these traits impact entrepreneurial dynamics?," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 394-409.
    9. Staniewski, Marcin W., 2016. "The contribution of business experience and knowledge to successful entrepreneurship," Journal of Business Research, Elsevier, vol. 69(11), pages 5147-5152.
    10. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    11. Elena-Loreni Baciu & Delia Vîrgă & Theofild-Andrei Lazăr, 2020. "What Characteristics Help Entrepreneurs ‘Make It’ Early on in Their Entrepreneurial Careers? Findings of a Regional Study from Romania," Sustainability, MDPI, Open Access Journal, vol. 12(12), pages 1-1, June.
    12. Tyrowicz, Joanna, 2011. "What distinguishes entrepreneurs? Evidence on the motives for self-employment," Economics Letters, Elsevier, vol. 112(3), pages 226-229, September.
    13. Hongyu Ma & Federico Topolansky Barbe & Yongmei Carol Zhang, 2018. "Can Social Capital and Psychological Capital Improve the Entrepreneurial Performance of the New Generation of Migrant Workers in China?," Sustainability, MDPI, Open Access Journal, vol. 10(11), pages 1-16, October.
    14. Man Zhang & Patriya Tansuhaj & James McCullough, 2009. "International entrepreneurial capability: The measurement and a comparison between born global firms and traditional exporters in China," Journal of International Entrepreneurship, Springer, vol. 7(4), pages 292-322, December.
    15. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
    16. Elli Diakanastasi & Angeliki Karagiannaki & Katerina Pramatari, 2018. "Entrepreneurial Team Dynamics and New Venture Creation Process: An Exploratory Study Within a Start-Up Incubator," SAGE Open, , vol. 8(2), pages 21582440187, June.
    17. R. Murugesan & R. Jayavelu, 2017. "The Influence of Big Five Personality Traits and Self-efficacy on Entrepreneurial Intention: The Role of Gender," The Journal of Entrepreneurship, Entrepreneurship Development Institute of India, vol. 3(1), pages 41-61, January.

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    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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