Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach

Marco Caliendo and Alexander Kritikos

No 2687, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper empirically analyzes whether the character-based approach, which is based on the personality structure and the human capital of business founders, allows prediction of entrepreneurial success. A unique data set is used consisting of 414 previously unemployed persons whose personal characteristics were screened by different methods, namely a one-day assessment center (AC) and a standardized questionnaire, before they launched their business. Results are partly unexpected: first, there is almost no correlation between the AC data and the questionnaire. Second, the predictive power of the AC data is slightly better than that of the questionnaire, but lower than expected in theory. Interestingly, for those subgroups where the AC data have low predictive power, the questionnaire does better. Third, when success is measured in terms of employees hired, the character-based approach is a poor predictor.

Keywords: entrepreneurship; psychological assessment; character-based approach; success prediction (search for similar items in EconPapers)
JEL-codes: C13 J23 M13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - published in: Kyklos, 2008, 61(2), 189-214

Downloads: (external link)
https://docs.iza.org/dp2687.pdf (application/pdf)

Related works:
Journal Article: Is Entrepreneurial Success Predictable? An Ex‐Ante Analysis of the Character‐Based Approach (2008)
Working Paper: Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach (2008)
Working Paper: Is Entrepreneurial Success Predictable?: An Ex-ante Analysis of the Character-Based Approach (2007)
Working Paper: Is entrepreneurial success predictable? An ex-ante analysis of the character-based approach (2007)
Working Paper: Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2687

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().