Small Business Economics

, Volume 32, Issue 2, pp 153–167 | Cite as

Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey

  • Marco CaliendoEmail author
  • Frank M. Fossen
  • Alexander S. Kritikos


The influence of risk aversion on the decision to become self-employed is a much discussed topic in the entrepreneurial literature. Conventional wisdom asserts that being an entrepreneur means making risky decisions; hence more risk-averse individuals are less likely to become entrepreneurs. In contrast to previous research, we are able to examine empirically whether the decision of starting a business is influenced by objectively measurable risk attitudes at the time when this decision is made. Our results show that in general, individuals with lower risk aversion are more likely to become self-employed. Sensitivity analysis reveals, however, that this is true only for people coming out of regular employment, whereas for individuals coming out of unemployment or inactivity, risk attitudes do not seem to play a role in the decision process.


Entrepreneurship Risk attitudes Self-employment 

JEL Classifications

D81 J23 L26 M13 



The authors thank Friedel Bolle, Peter Haan, Dieter Nautz, Michael Frese, Günther Müller, Viktor Steiner, Joachim Wagner, the editor and two anonymous referees for valuable comments. The usual disclaimer applies.


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Copyright information

© Springer Science+Business Media, LLC. 2007

Authors and Affiliations

  • Marco Caliendo
    • 1
    Email author
  • Frank M. Fossen
    • 2
  • Alexander S. Kritikos
    • 3
  1. 1.Institute for the Study of Labor, IZABonnGermany
  2. 2.DIW BerlinBerlinGermany
  3. 3.Private Hanseuniversität RostockRostockGermany

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