Personality Characteristics and the Decision to Become and Stay Self-Employed

Marco Caliendo, Frank Fossen and Alexander Kritikos

No 5566, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper systematically investigates whether different kinds of personality characteristics influence entrepreneurial development. On the basis of a large, representative household panel survey, we examine the extent to which the Big Five traits and further personality characteristics, which are more specifically related to entrepreneurial tasks, influence entry into self-employment and survival of self-employed persons in Germany. The empirical analysis reveals that among the specific characteristics in particular "risk attitudes" and "locus of control" have strong effects on entry and survival. With respect to the Big Five approach, in particular the traits "openness to experience" and "extraversion" and to a lower extent "agreeableness" and "neuroticism" help to explain entrepreneurial development. The explanatory power of the Big Five is comparable to one of the most prominent determinants of entrepreneurship – education – and approximately three times larger than parental self-employment.

Keywords: locus of control; risk aversion; Big Five; personality; entrepreneurship (search for similar items in EconPapers)
JEL-codes: D81 J23 M13 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2011-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

Published - revised version published in: Small Business Economics, 2014, 42 (4), 787-814

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Related works:
Journal Article: Personality characteristics and the decisions to become and stay self-employed (2014)
Working Paper: Personality Characteristics and the Decision to Become and Stay Self-Employed (2011)
Working Paper: Personality Characteristics and the Decision to Become and Stay Self-Employed (2011)
Working Paper: Personality characteristics and the decision to become and stay self-employed (2011)
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