IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Personality Characteristics and the Decision to Become and Stay Self-Employed

  • Marco Caliendo
  • Frank M. Fossen
  • Alexander S. Kritikos

This paper systematically investigates whether different kinds of personality characteristics influence entrepreneurial development. On the basis of a large, representative household panel survey, we examine the extent to which the Big Five traits and further personality characteristics, which are more specifically related to entrepreneurial tasks, influence entry into self-employment and survival of self-employed persons in Germany. The empirical analysis reveals that among the specific characteristics in particular "risk attitudes" and "locus of control" have strong effects on entry and survival. With respect to the Big Five approach, in particular the traits "openness to experience" and "extraversion" and to a lower extent "agreeableness" and "neuroticism" help to explain entrepreneurial development. The explanatory power of the Big Five is comparable to one of the most prominent determinants of entrepreneurship - education - and approximately three times larger than parental selfemployment.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.369399.de/dp1113.pdf
Download Restriction: no

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1113.

as
in new window

Length: 61 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwwpp:dp1113
Contact details of provider: Postal: Mohrenstraße 58, D-10117 Berlin
Phone: xx49-30-89789-0
Fax: xx49-30-89789-200
Web page: http://www.diw.de/en
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Borghans, Lex & Duckworth, Angela Lee & Heckman, James J. & Weel, Bas ter, 2008. "The Economics and Psychology of Personality Traits," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Lang, Frieder R. & John, Dennis & Lüdtke, Oliver & Schupp, Jürgen & Wagner, Gert G., 2011. "Short Assessment of the Big Five: Robust Across Survey Methods Except Telephone Interviewing," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 548-567.
  3. Frank M. Fossen, 2009. "Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model," Discussion Papers of DIW Berlin 936, DIW Berlin, German Institute for Economic Research.
  4. Galina Vereshchagina & Hugo A. Hopenhayn, 2009. "Risk Taking by Entrepreneurs," American Economic Review, American Economic Association, vol. 99(5), pages 1808-30, December.
  5. 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, 05.
  6. Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 29-36, May.
  7. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
  8. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
  9. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
  10. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, 06.
  11. Hansemark, Ove C., 2003. "Need for achievement, locus of control and the prediction of business start-ups: A longitudinal study," Journal of Economic Psychology, Elsevier, vol. 24(3), pages 301-319, June.
  12. Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2010. "Trust, Positive Reciprocity, and Negative Reciprocity: Do These Traits Impact Entrepreneurial Dynamics?," IZA Discussion Papers 5370, Institute for the Study of Labor (IZA).
  13. Nigel Nicholson & Emma Soane & Mark Fenton-O'Creevy & Paul Willman, 2005. "Personality and domain-specific risk taking," Journal of Risk Research, Taylor & Francis Journals, vol. 8(2), pages 157-176, March.
  14. Joop Hartog & Mirjam van Praag & Justin van der Sluis, 2008. "If you are so smart, why aren't you an entrepreneur? Returns to cognitive and social ability: Entrepreneurs versus employees," Jena Economic Research Papers 2008-084, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  15. Marco Caliendo & Frank M. Fossen & Alexander S. Kritikos, 2008. "The Impact of Risk Attitudes on Entrepreneurial Survival," SOEPpapers on Multidisciplinary Panel Data Research 108, DIW Berlin, The German Socio-Economic Panel (SOEP).
  16. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  17. Oosterbeek, Hessel & van Praag, Mirjam & Ijsselstein, Auke, 2010. "The impact of entrepreneurship education on entrepreneurship skills and motivation," European Economic Review, Elsevier, vol. 54(3), pages 442-454, April.
  18. Verheul, Ingrid & Thurik, Roy & Grilo, Isabel & van der Zwan, Peter, 2012. "Explaining preferences and actual involvement in self-employment: Gender and the entrepreneurial personality," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 325-341.
  19. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  20. Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally Validated Survey," Discussion Papers 252, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
  21. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
  22. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
  23. Fairlie, Robert, 2014. "Entrepreneurship Training, Risk Aversion and Other Personality Traits: Evidence from a Random Experiment," Santa Cruz Department of Economics, Working Paper Series qt9x83w5k4, Department of Economics, UC Santa Cruz.
  24. van Gelderen, Marco & Frese, Michael & Thurik, Roy, 2000. " Strategies, Uncertainty and Performance of Small Business Startups," Small Business Economics, Springer, vol. 15(3), pages 165-81.
  25. Chen, Chao C. & Greene, Patricia Gene & Crick, Ann, 1998. "Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?," Journal of Business Venturing, Elsevier, vol. 13(4), pages 295-316, July.
  26. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
  27. Bonnett, Celia & Furnham, Adrian, 1991. "Who wants to be an entrepreneur? A study of adolescents interested in a Young Enterprise scheme," Journal of Economic Psychology, Elsevier, vol. 12(3), pages 465-478, September.
  28. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, vol. 55(1), pages 3-26.
  29. Peter Haan & Victoria Prowse, 2009. "A Structural Approach to Estimating the Effect of Taxation on the Labor Market Dynamics of Older Workers," SOEPpapers on Multidisciplinary Panel Data Research 185, DIW Berlin, The German Socio-Economic Panel (SOEP).
  30. van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February.
  31. 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.
  32. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
  33. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
  34. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  35. Baron, Robert A., 2004. "The cognitive perspective: a valuable tool for answering entrepreneurship's basic "why" questions," Journal of Business Venturing, Elsevier, vol. 19(2), pages 221-239, March.
  36. van Praag, Mirjam C. & van Witteloostuijn, Arjen & van der Sluis, Justin, 2009. "Returns for Entrepreneurs vs. Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vs. Wage Employees," IZA Discussion Papers 4628, Institute for the Study of Labor (IZA).
  37. 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.
  38. Ciavarella, Mark A. & Buchholtz, Ann K. & Riordan, Christine M. & Gatewood, Robert D. & Stokes, Garnett S., 2004. "The Big Five and venture survival: Is there a linkage?," Journal of Business Venturing, Elsevier, vol. 19(4), pages 465-483, July.
  39. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
Full references (including those not matched with items on IDEAS)

This item is featured on the following reading lists or Wikipedia pages:

  1. SOEP based publications

When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp1113. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.