Risk Preferences and Entrepreneurial Decision-Making: Evidence from Experimental Methods in Vietnam

Truc Thanh Tran () and Nam Khanh Pham
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Truc Thanh Tran: School of Economics, College of Economics, Law and Government, University of Economics Ho Chi Minh City, Ho Chi Minh City 700000, Vietnam
Nam Khanh Pham: School of Economics, College of Economics, Law and Government, University of Economics Ho Chi Minh City, Ho Chi Minh City 700000, Vietnam

Sustainability, 2024, vol. 16, issue 11, 1-16

Abstract: This study investigates the relationship between risk preferences and entrepreneurial decisions within the Vietnamese context through controlled laboratory experiments. Specifically, we examine whether individuals with higher levels of risk aversion are more likely to become fixed-wage employees, while those with a propensity for risk-taking are more likely to pursue entrepreneurial ventures. Our findings underscore a significant relationship between risk aversion and the initiation of new businesses at the point of decision-making. Individuals exhibiting greater risk aversion demonstrate a decreased likelihood of venturing into entrepreneurship compared to their risk-taking or risk-neutral counterparts. Importantly, this relationship withstands variations in experimental measures of risk preferences, affirming its robustness across diverse contexts. These insights contribute to a deeper understanding of the role of risk attitudes in shaping entrepreneurial behavior and hold implications for policy interventions aimed at fostering entrepreneurship in Vietnam.

Keywords: entrepreneurial decision making; risk preferences; investment decision; Vietnam (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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