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The attitude toward the risk of entrepreneurial activity: Evidence from Chile

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  • Jean P. Sepulveda
  • Claudio Bonilla

    (School of Business and Economics, Universidad del Desarrollo)

Abstract

We study the factors that may influence the attitude toward the risk of entrepreneurial activity and its impact on the propensity to become an entrepreneur. We proxy the attitude toward risk by using the answers to the fear of failing question contained in the Global Entrepreneurship Monitor survey. Interesting results are found. First, we found that being male, having more years of formal education and believing to have the necessary skills to developing a new venture have all a negative effect on an individual`s attitude toward risk and therefore, increase the probability of becoming an entrepreneur. Age affects the risk in a quadratic way (first positive but after to some point negative). Finally, contrary to conventional wisdom, having the experience of shutting down a business has no effect on the risk`s attitude for developing a new venture in the Chilean case.

Suggested Citation

  • Jean P. Sepulveda & Claudio Bonilla, 2010. "The attitude toward the risk of entrepreneurial activity: Evidence from Chile," Past Working Papers 03, Universidad del Desarrollo, School of Business and Economics, revised Aug 2010.
  • Handle: RePEc:dsr:pastwp:03
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    References listed on IDEAS

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    Cited by:

    1. Mohammed Nishat & Talha Nadeem, 2016. "Factors Explaining the Risk Attitude towards Entrepreneurship in Pakistan: An Exploratory Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 715-723.
    2. Yousef S. Daoud & Shaker Sarsour & Ruba Shanti & Sanaa Kamal, 2020. "Risk tolerance, gender, and entrepreneurship: The Palestinian case," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 766-789, August.
    3. Jean P. Sepulveda & Claudio Bonilla, 2014. "Determinants of the Risk Attitude in Entrepreneurship: Evidence from Latin America," Past Working Papers 18, Universidad del Desarrollo, School of Business and Economics.
    4. Ángel Samaniego Alcántar & Gerardo Reyes Ruiz, 2016. "Factores que influyen sobre la conducta de una persona frente al riesgo de emprender un negocio en América Latina," Journal of Business, Universidad del Pacífico (Lima, Perú), Universidad del Pacífico (Lima, Perú), vol. 8(1), pages 57-71.
    5. Claudia Álvarez & David Urbano & José Amorós, 2014. "GEM research: achievements and challenges," Small Business Economics, Springer, vol. 42(3), pages 445-465, March.

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    More about this item

    Keywords

    Fear of failing; risk aversion; entrepreneurship; GEM.;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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