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What are Entrepreneurs' Objectives When Starting a New Business?

  • Lionel Desiage

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS)

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