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Does Personality Matter? Small Business Owners and Modes of Innovation

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  • Runst, Petrik
  • Thomä, Jörg

Abstract

The DUI (learning by doing-using-interacting) mode offers a promising theoretical framework to explain why many small and medium-sized enterprises (SMEs) are successful in innovation without research and development (R&D) efforts. In this context, we argue that - because of the informal, person-centered, and interactive nature of the DUI mode - small business owners should be in a key position to trigger DUI learning processes at the company level. Based on a large SME data set from Germany, we show empirically that Big Five personality traits of small business owners positively affect self-selection into DUI-based innovation in less R&D-intensive SMEs. That is, companies operating largely under the DUI mode seem to benefit in particular from certain owners' personality characteristics. In addition, we present novel evidence that complementarities between different Big Five traits exist in terms of self-selection into the DUI mode, thereby pointing to the role of certain personality prototypes. The paper concludes with implications for policy and further research.

Suggested Citation

  • Runst, Petrik & Thomä, Jörg, 2020. "Does Personality Matter? Small Business Owners and Modes of Innovation," ifh Working Papers 24/2020, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh), revised 2020.
    • Handle: RePEc:zbw:ifhwps:242019
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    More about this item

    Keywords

    modes of innovation; non-R&D innovation; Big Five personality traits; personality prototypes; SMEs;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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