IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20120062.html
   My bibliography  Save this paper

Why do Entrepreneurial Parents have Entrepreneurial Children?

Author

Listed:
  • Matthew Lindquist

    (SOFI Stockholm University)

  • Joeri Sol

    (University of Amsterdam)

  • Mirjam van Praag

    (Copenhagen Business School, Denmark)

Abstract

This discussion paper resulted in a publication in the 'Journal of Labor Economics' , 33(2), (April 2015), 269-296. Parental entrepreneurship is a strong, probably the strongest, determinant of own entrepreneurship. We explore the origins of this intergenerational association in entrepreneurship. In particular, we identify the separate effects of pre- and post-birth factors (nature and nurture), by using a unique dataset of Swedish adoptees. Its unique characteristic is that it not only includes data on occupational status for the adoptees and their adoptive parents, but also for their biological parents. Moreover, we use comparable data on entrepreneurship for a large, representative sample of the Swedish population. Based on the latter sample, and consistent with previous findings, we show that parental entrepreneurship increases the probability of children's entrepreneurship by about 60%. We further show that for adoptees, both biological and adoptive parents make significant contributions. These effects, however, are quite different in size. The effect of post-bir th factors (adoptive parents) is approximately twice as large as the effect of pre-birth factors (biological parents). The sum of these two effects for adopted children is almost identical to the intergenerational transmission of entrepreneurship for own-birth children. We explore several candidate explanations for this important post-birth effect and present suggestive evidence in favor of role modeling.

Suggested Citation

  • Matthew Lindquist & Joeri Sol & Mirjam van Praag, 2012. "Why do Entrepreneurial Parents have Entrepreneurial Children?," Tinbergen Institute Discussion Papers 12-062/3, Tinbergen Institute, revised 30 Apr 2014.
  • Handle: RePEc:tin:wpaper:20120062
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/12062.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bosma, Niels & Hessels, Jolanda & Schutjens, Veronique & Praag, Mirjam Van & Verheul, Ingrid, 2012. "Entrepreneurship and role models," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 410-424.
    2. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 999-1028.
    3. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
    4. 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.
    5. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
    6. 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.
    7. Tsou, Meng-Wen & Liu, Jin-Tan & Hammitt, James K., 2012. "The intergenerational transmission of education: Evidence from Taiwanese adoptions," Economics Letters, Elsevier, vol. 115(1), pages 134-136.
    8. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    9. Bingley, Paul & Corak, Miles & Westergård-Nielsen, Niels C., 2011. "The Intergenerational Transmission of Employers in Canada and Denmark," IZA Discussion Papers 5593, Institute of Labor Economics (IZA).
    10. Nathalie Colombier & David Masclet, 2008. "Intergenerational correlation in self employment: some further evidence from French ECHP data," Small Business Economics, Springer, vol. 30(4), pages 423-437, April.
    11. Hjalmarsson, Randi & Lindquist, Matthew J., 2013. "The origins of intergenerational associations in crime: Lessons from Swedish adoption data," Labour Economics, Elsevier, vol. 20(C), pages 68-81.
    12. Koellinger, Philipp & Minniti, Maria & Schade, Christian, 2007. ""I think I can, I think I can": Overconfidence and entrepreneurial behavior," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 502-527, August.
    13. Lina Andersson & Mats Hammarstedt, 2011. "Transmission of self-employment across immigrant generations: the importance of ethnic background and gender," Review of Economics of the Household, Springer, vol. 9(4), pages 555-577, December.
    14. 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.
    15. 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.
    16. Hu, Ze-Chun & Ma, Zhi-Ming & Sun, Wei, 2009. "Nonlinear filtering of semi-Dirichlet processes," Stochastic Processes and their Applications, Elsevier, vol. 119(11), pages 3890-3913, November.
    17. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 645-677.
    18. Nicos Nicolaou & Scott Shane, 2010. "Entrepreneurship And Occupational Choice: Genetic And Environmental Influences," Post-Print hal-00856601, HAL.
    19. repec:use:tkiwps:332 is not listed on IDEAS
    20. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
    21. Bernard F. Lentz & David N. Laband, 1990. "Entrepreneurial Success and Occupational Inheritance among Proprietors," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 563-579, August.
    22. Baron, Robert A. & Markman, Gideon D., 2003. "Beyond social capital: the role of entrepreneurs' social competence in their financial success," Journal of Business Venturing, Elsevier, vol. 18(1), pages 41-60, January.
    23. Duncan Thomas, 1994. "Like Father, like Son; Like Mother, like Daughter: Parental Resources and Child Height," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 950-988.
    24. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    25. Laspita, Stavroula & Breugst, Nicola & Heblich, Stephan & Patzelt, Holger, 2012. "Intergenerational transmission of entrepreneurial intentions," Journal of Business Venturing, Elsevier, vol. 27(4), pages 414-435.
    26. Li, Yuqiang, 2009. "Limit theorems for generalized Jirina processes," Statistics & Probability Letters, Elsevier, vol. 79(2), pages 158-164, January.
    27. Miles Corak & Patrizio Piraino, 2011. "The Intergenerational Transmission of Employers," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 37-68, January.
    28. Matthijs J H M van der Loos & Cornelius A Rietveld & Niina Eklund & Philipp D Koellinger & Fernando Rivadeneira & Gonçalo R Abecasis & Georgina A Ankra-Badu & Sebastian E Baumeister & Daniel J Benjami, 2013. "The Molecular Genetic Architecture of Self-Employment," PLOS ONE, Public Library of Science, vol. 8(4), pages 1-15, April.
    29. Esteban Lafuente & Yancy Vaillant & Josep Rialp, 2007. "Regional Differences in the Influence of Role Models: Comparing the Entrepreneurial Process of Rural Catalonia," Regional Studies, Taylor & Francis Journals, vol. 41(6), pages 779-796.
    30. Nicolaou, Nicos & Shane, Scott, 2009. "Can genetic factors influence the likelihood of engaging in entrepreneurial activity?," Journal of Business Venturing, Elsevier, vol. 24(1), pages 1-22, January.
    31. David B. Audretsch & Oliver Falck & Stephan Heblich & Adam Lederer (ed.), 2011. "Handbook of Research on Innovation and Entrepreneurship," Books, Edward Elgar Publishing, number 13275.
    32. Carroll, Glenn R. & Mosakowski, Elaine M., 1987. "The Career Dynamics of Self-Employment," Institute for Research on Labor and Employment, Working Paper Series qt13p1n10b, Institute of Industrial Relations, UC Berkeley.
    33. David Cesarini & Magnus Johannesson & Paul Lichtenstein & Björn Wallace, 2009. "Heritability of Overconfidence," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 617-627, 04-05.
    34. Nicolaou, Nicos & Shane, Scott, 2010. "Entrepreneurship and occupational choice: Genetic and environmental influences," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 3-14, October.
    35. Lina Andersson & Mats Hammarstedt, 2010. "Intergenerational transmissions in immigrant self-employment: Evidence from three generations," Small Business Economics, Springer, vol. 34(3), pages 261-276, April.
    36. Philipp Koellinger & Matthijs Loos & Patrick Groenen & A. Thurik & Fernando Rivadeneira & Frank Rooij & André Uitterlinden & Albert Hofman, 2010. "Genome-wide association studies in economics and entrepreneurship research: promises and limitations," Small Business Economics, Springer, vol. 35(1), pages 1-18, July.
    37. David Cesarini & Christopher T. Dawes & Magnus Johannesson & Paul Lichtenstein & Björn Wallace, 2009. "Genetic Variation in Preferences for Giving and Risk Taking," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 809-842.
    38. Nicos Nicolaou & Scott Shane & Lynn Cherkas & Janice Hunkin & Tim D. Spector, 2008. "Is the Tendency to Engage in Entrepreneurship Genetic?," Management Science, INFORMS, vol. 54(1), pages 167-179, January.
    39. Zhang, Zhen & Zyphur, Michael J. & Narayanan, Jayanth & Arvey, Richard D. & Chaturvedi, Sankalp & Avolio, Bruce J. & Lichtenstein, Paul & Larsson, Gerry, 2009. "The genetic basis of entrepreneurship: Effects of gender and personality," Organizational Behavior and Human Decision Processes, Elsevier, vol. 110(2), pages 93-107, November.
    40. Ramana Nanda & Jesper B. Sørensen, 2010. "Workplace Peers and Entrepreneurship," Management Science, INFORMS, vol. 56(7), pages 1116-1126, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vladasel, Theodor & Lindquist, Matthew J. & Sol, Joeri & van Praag, Mirjam, 2021. "On the origins of entrepreneurship: Evidence from sibling correlations," Journal of Business Venturing, Elsevier, vol. 36(5).
    2. Staniewski, Marcin Waldemar & Awruk, Katarzyna, 2021. "Parental attitudes and entrepreneurial success," Journal of Business Research, Elsevier, vol. 123(C), pages 538-546.
    3. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    4. Matthijs J H M van der Loos & Cornelius A Rietveld & Niina Eklund & Philipp D Koellinger & Fernando Rivadeneira & Gonçalo R Abecasis & Georgina A Ankra-Badu & Sebastian E Baumeister & Daniel J Benjami, 2013. "The Molecular Genetic Architecture of Self-Employment," PLOS ONE, Public Library of Science, vol. 8(4), pages 1-15, April.
    5. Gutiérrez, Antonio & Velilla, Jorge, 2022. "La transmisión intergeneracional en el autoempleo: El efecto de la situación financiera familiar [The effect of family financial status on intergenerational transmission of self-employment]," MPRA Paper 113619, University Library of Munich, Germany.
    6. Giménez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2022. "Intergenerational correlation of self-employment in Western Europe," Economic Modelling, Elsevier, vol. 108(C).
    7. Graciela Kuechle, 2019. "The contribution of behavior genetics to entrepreneurship: An evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 29(4), pages 1263-1284, September.
    8. Sandra Ferrando-Latorre & Jorge Velilla & Raquel Ortega, 2019. "Intergenerational Transmission of Entrepreneurial Activity in Spanish Families," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 390-407, September.
    9. Philipp Koellinger & Matthijs Loos & Patrick Groenen & A. Thurik & Fernando Rivadeneira & Frank Rooij & André Uitterlinden & Albert Hofman, 2010. "Genome-wide association studies in economics and entrepreneurship research: promises and limitations," Small Business Economics, Springer, vol. 35(1), pages 1-18, July.
    10. Gimenez-Nadal, J. Ignacio & Molina, José Alberto & Velilla, Jorge, 2020. "Short- vs Long-Term Intergenerational Correlations of Employment and Self-Employment in Europe," IZA Discussion Papers 12933, Institute of Labor Economics (IZA).
    11. Veronique Schutjens & Niels Bosma & Jolanda Hessels & Mirjam Van Praag & Ingrid Verheul, 2011. "The strength of a good example: How important are role models for early-stage entrepreneurs?," ERSA conference papers ersa10p531, European Regional Science Association.
    12. Bosma, Niels & Hessels, Jolanda & Schutjens, Veronique & Praag, Mirjam Van & Verheul, Ingrid, 2012. "Entrepreneurship and role models," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 410-424.
    13. Michael Wyrwich, 2015. "Entrepreneurship and the intergenerational transmission of values," Small Business Economics, Springer, vol. 45(1), pages 191-213, June.
    14. Anders Hoffmann & Martin Junge & Nikolaj Malchow-Møller, 2015. "Running in the family: parental role models in entrepreneurship," Small Business Economics, Springer, vol. 44(1), pages 79-104, January.
    15. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
    16. Elke Lüdemann, 2011. "Schooling and the Formation of Cognitive and Non-cognitive Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 39.
    17. Cornelius A. Rietveld & Eric A.W. Slob & A. Roy Thurik, 2021. "A decade of research on the genetics of entrepreneurship: a review and view ahead," Small Business Economics, Springer, vol. 57(3), pages 1303-1317, October.
    18. Eesley, Charles & Wang, Yanbo, 2017. "Social influence in career choice: Evidence from a randomized field experiment on entrepreneurial mentorship," Research Policy, Elsevier, vol. 46(3), pages 636-650.
    19. Henley, Andrew, 2019. "Transitioning from Solo Self-Employed to Microbusiness Employer: Local Economic Environment or Owner Characteristics?," IZA Discussion Papers 12189, Institute of Labor Economics (IZA).
    20. Paul A. Coomes & Jose Fernandez & Stephan F. Gohmann, 2013. "The Rate of Proprietorship Among Metropolitan Areas: The Impact of the Local Economic Environment and Capital Resources," Entrepreneurship Theory and Practice, , vol. 37(4), pages 745-770, July.

    More about this item

    Keywords

    adoption; entrepreneurship; self-employment; intergenerational mobility; occupational choice; role model;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20120062. 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: . General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.