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Founder personality and start-up subsidies

Gary Chapman and Hanna Hottenrott

No 23-008, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Start-up subsidies play an important role in supporting start-up innovation and performance. However, what characteristics help and hinder start-ups to seek start-up subsidies remains unclear. We study whether and how founder personality, as captured by the big five personality traits and entrepreneurial orientation, impacts entrepreneurs' seeking of start-up subsidies. We argue that greater founder openness, extraversion and entrepreneurial orientation enhance seeking of start-up subsidies, while greater founder agreeableness, conscientiousness, and neuroticism inhibits it. Additionally, we argue that entrepreneurial orientation plays a mediating role in the relationship between big five personality traits and start-up subsidies. Drawing on a large multi-sector sample of German start-ups, we find strong evidence for a positive role of founder entrepreneurial orientation. While we find little evidence for a direct effect of a founder's big five personality, we find evidence of an indirect effect through its influence on entrepreneurial orientation.

Keywords: Start-up subsidies; start-up financing; entrepreneurship policy; entrepreneurial orientation; big five personality traits; venture capital (search for similar items in EconPapers)
JEL-codes: G24 L26 O25 O31 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino and nep-sbm
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