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Do risk attitudes differ within the group of entrepreneurs?

  • Block, Joern
  • Sandner, Philipp
  • Spiegel, Frank

The notion of risk and entrepreneurship has been widely discussed in the entrepreneurship literature. Starting a business involves risk and requires a risk-taking attitude. Most studies have com-pared entrepreneurs with non-entrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of different types of entrepreneurs. This study aims to fill this gap. Our particular focus is on the entrepreneurs’ motivations to start their business. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, entrepreneurs who are motivated by creativity are more risk-tolerant than other entrepreneurs. The study contributes to the literature about risk attitudes of entrepreneurs and to the literature about necessity and opportunity entrepreneurship.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17587.

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Date of creation: 29 Sep 2009
Date of revision:
Handle: RePEc:pra:mprapa:17587
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  1. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
  2. David A. Jaeger & Holger Bonin & Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2007. "Direct Evidence on Risk Attitudes and Migration," Working Papers 50, Department of Economics, College of William and Mary.
  3. Kamhon KAN & Wei-Der TSAI, 2005. "Entrepreneurship and Risk Aversion," IEAS Working Paper : academic research 05-A008, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  4. Jörn Block & Philipp Sandner, 2009. "Necessity and Opportunity Entrepreneurs and Their Duration in Self-employment: Evidence from German Micro Data," SOEPpapers on Multidisciplinary Panel Data Research 191, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Sander Wennekers & André Stel & Roy Thurik & Paul Reynolds, 2008. "Nascent entrepreneurship and the level of economic development," Small Business Economics, Springer, vol. 30(3), pages 325-325, March.
  6. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2007. "Are Risk Aversion and Impatience Related to Cognitive Ability?," IZA Discussion Papers 2735, Institute for the Study of Labor (IZA).
  7. Palich, Leslie E. & Ray Bagby, D., 1995. "Using cognitive theory to explain entrepreneurial risk-taking: Challenging conventional wisdom," Journal of Business Venturing, Elsevier, vol. 10(6), pages 425-438, November.
  8. Block, Joern & Wagner, Marcus, 2006. "Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials," MPRA Paper 610, University Library of Munich, Germany.
  9. van Gelderen, A.M. & Frese, M. & Thurik, A.R., 2000. "Strategies, Uncertainty and Performance of Small Business Startups," ERIM Report Series Research in Management ERS-2000-18-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  10. Janney, Jay J. & Dess, Gregory G., 2006. "The risk concept for entrepreneurs reconsidered: New challenges to the conventional wisdom," Journal of Business Venturing, Elsevier, vol. 21(3), pages 385-400, May.
  11. Dohmen, Thomas J & Falk, Armin & Huffman, David & Schupp, Jürgen & Sunde, Uwe & Wagner, Gert Georg, 2006. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," CEPR Discussion Papers 5517, C.E.P.R. Discussion Papers.
  12. Joachim Wagner, 2005. "Nascent Necessity and Opportunity Entrepreneurs in Germany. Evidence from the Regional Entrepreneurship Monitor (REM)," Labor and Demography 0506004, EconWPA.
  13. Sarasvathy, D. K. & Simon, Herbert A. & Lave, Lester, 1998. "Perceiving and managing business risks: differences between entrepreneurs and bankers," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 207-225, January.
  14. 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.
  15. Tan, Justin, 2001. "Innovation and risk-taking in a transitional economy: A comparative study of chinese managers and entrepreneurs," Journal of Business Venturing, Elsevier, vol. 16(4), pages 359-376, July.
  16. Sandner, Philipp G. & Block, Jörn H. & Lutz, Andreas, 2008. "Determinanten des Erfolgs staatlich geförderter Existenzgründungen – eine empirische Untersuchung," Discussion Papers in Business Administration 2968, University of Munich, Munich School of Management.
  17. Scott Shane, 2009. "Why encouraging more people to become entrepreneurs is bad public policy," Small Business Economics, Springer, vol. 33(2), pages 141-149, August.
  18. Ray, Dennis M., 1994. "The role of risk-taking in Singapore," Journal of Business Venturing, Elsevier, vol. 9(2), pages 157-177, March.
  19. Poh Wong & Yuen Ho & Erkko Autio, 2005. "Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data," Small Business Economics, Springer, vol. 24(3), pages 335-350, 01.
  20. Forlani, David & Mullins, John W., 2000. "Perceived risks and choices in entrepreneurs' new venture decisions," Journal of Business Venturing, Elsevier, vol. 15(4), pages 305-322, July.
  21. William Norton & William Moore, 2006. "The Influence of Entrepreneurial Risk Assessment on Venture Launch or Growth Decisions," Small Business Economics, Springer, vol. 26(3), pages 215-226, 04.
  22. Heiko Bergmann & Rolf Sternberg, 2007. "The Changing Face of Entrepreneurship in Germany," Small Business Economics, Springer, vol. 28(2), pages 205-221, March.
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