Entrepreneurial Risk Without Return? Empirical Evidence from Self-Employed Accountants in Germany

Robert Rieg

Chapter Chapter 13 in Entrepreneurship, Innovation and Economic Crisis, 2014, pp 117-126 from Springer

Abstract: Abstract Economic theories of entrepreneurship state that the higher risks of self-employment should be compensated by higher profits compared to income earned by those being on the payroll of firms. Yet, this seems not always the case given the evidence provided in this chapter: Self-employed accountants in Germany earn on average less than full-time employees. Only a minority earns higher profits. The evidence is reconciled with economic theory of entrepreneurship through considering situational and preferential causes. Firstly, self-employed accountants face lower risks than other professions; secondly they compensate lower earnings with higher preferences for independence and autonomy. A further factor yet not often considered in entrepreneurship research is the service portfolio offered. Accountants can influence their returns through the services they offer. A significant amount of the respondents chose less profitable services. The paper contributes to the literature on economic analysis of entrepreneurship in providing evidence not available before and on stressing the importance of evaluating peculiarities of professions as well as contexts in order to understand decisions for self-employment.

Keywords: Risk Premium; Public Accountant; Entrepreneurial Research; Income Differential; Service Portfolio (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-02384-7_13

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DOI: 10.1007/978-3-319-02384-7_13

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