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Perceptual Variables and Nascent Entrepreneurship

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  • Pia Arenius
  • Maria Minniti

Abstract

Using a large sample of individuals in 28 countries, we investigate what variables are significantly correlated with an individual’s decision to become an entrepreneur. Following existing literature in economics, we link such a decision to demographic and economic characteristics. In addition, we argue that perceptual variables such as alertness to opportunities, fear of failure, and confidence about one’s own skills are also important. Our results suggest that perceptual variables are significantly correlated with new business creation across all countries in our sample and across gender. Although our data do not allow the identification of causal relationships, our findings suggest that, when making decisions, nascent entrepreneurs rely significantly on subjective and often biased perceptions rather than on objective expectations of success. Thus, perceptual variables should be included in economic models of entrepreneurial behavior. Copyright Springer 2005

Suggested Citation

  • Pia Arenius & Maria Minniti, 2005. "Perceptual Variables and Nascent Entrepreneurship," Small Business Economics, Springer, vol. 24(3), pages 233-247, February.
  • Handle: RePEc:kap:sbusec:v:24:y:2005:i:3:p:233-247
    DOI: 10.1007/s11187-005-1984-x
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    References listed on IDEAS

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    1. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
    2. Minniti, Maria, 2005. "Entrepreneurship and network externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 57(1), pages 1-27, May.
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