Do Entrepreneurial Goals Matter? Resource Allocation in New Owner-Managed Firms
This paper focuses on how entrepreneurial goals affect the resource allocation of new firm owners. It connects research in psychology and management that examines the core motivations of entrepreneurs with research in economics that models the behavior of owner-managers as utility-maximizing rather than profit-maximizing. We hypothesize that new owners with nonmonetary goals allocate their resources differently than do owners with monetary goals and that the differences are meaningful in size. To test these hypotheses, we estimate firm level equations based on economic theories of factor demand that show how input quantities depend on owner goals. Data come from a national survey of new U.S. business owners. We find owner goals have both a statistically and substantively significant effect on resource allocation for new firms. Owners with nonmonetary goals put in more of their own and family hours rather than hiring outside employees. Implications for research and policy are discussed.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Ritter Annex 877, Philadelphia, PA 19122|
Web page: http://www.cla.temple.edu/economics/
More information through EDIRC
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.:
- Santarelli, Enrico & Vivarelli, Marco, 2006.
"Entrepreneurship and the Process of Firms’ Entry, Survival and Growth,"
IZA Discussion Papers
2475, Institute for the Study of Labor (IZA).
- Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 455-488, June.
- Mark Casson (ed.), 0. "Entrepreneurship," Books, Edward Elgar Publishing, number 537.
- Shane, Scott & Kolvereid, Lars & Westhead, Paul, 1991. "An exploratory examination of the reasons leading to new firm formation across country and gender," Journal of Business Venturing, Elsevier, vol. 6(6), pages 431-446, November.
- Scott Morton, Fiona M & Podolny, Joel M, 2002. "Love or Money? The Effects of Owner Motivation in the California Wine Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 431-56, December.
- Parker,Simon C., 2006.
"The Economics of Self-Employment and Entrepreneurship,"
Cambridge University Press, number 9780521030632, June.
- Parker,Simon C., 2004. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521828130, June.
- Gatewood, Elizabeth J. & Shaver, Kelly G. & Gartner, William B., 1995. "A longitudinal study of cognitive factors influencing start-up behaviors and success at venture creation," Journal of Business Venturing, Elsevier, vol. 10(5), pages 371-391, September.
- Cassar, Gavin & Craig, Justin, 2009. "An investigation of hindsight bias in nascent venture activity," Journal of Business Venturing, Elsevier, vol. 24(2), pages 149-164, March.
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Donald Bruce & Mohammed Mohsin, 2006. "Tax Policy and Entrepreneurship: New Time Series Evidence," Small Business Economics, Springer, vol. 26(5), pages 409-425, 06.
- Carter, Nancy M. & Gartner, William B. & Shaver, Kelly G. & Gatewood, Elizabeth J., 2003. "The career reasons of nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(1), pages 13-39, January.
- Birley, Sue & Westhead, Paul, 1994. "A taxonomy of business start-up reasons and their impact on firm growth and size," Journal of Business Venturing, Elsevier, vol. 9(1), pages 7-31, January.
- Minniti, Maria & Lévesque, Moren, 2008. "Recent developments in the economics of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 603-612, November.
When requesting a correction, please mention this item's handle: RePEc:tem:wpaper:1203. 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: (Dimitrios Diamantaras)
If references are entirely missing, you can add them using this form.