Small Business Economics

, Volume 39, Issue 1, pp 39–59 | Cite as

Identity and entrepreneurship: do school peers shape entrepreneurial intentions?

  • Oliver Falck
  • Stephan Heblich
  • Elke Luedemann


We incorporate the concept of social identity into entrepreneurship and analyze the determinants of having entrepreneurial intentions. We argue that an entrepreneurial identity results from an individual’s socialization. This could be parental influence but, as argued in this paper, also peer influence. Based on Programme for International Student Assessment (PISA) 2006 data in which students report their entrepreneurial intentions at the age of 15, we find that having an entrepreneurial peer group has a positive effect on an individual’s entrepreneurial intentions. We find that the strength of the peer effect in a country is moderated by prevailing values, namely individualism.


Social identity Entrepreneurial intentions Entrepreneurship Peer effects 

JEL Classifications

J24 L26 Z13 



We are grateful to David Audretsch, Lee Flemming, Oliver Kirchkamp, Adam Lederer, Mirjam van Praag, Simon Parker, Olav Sorenson, and Ludger Wößmann for helpful comments on an earlier version of this manuscript. We also thank the conference participants at the Spring 2009 Meeting of Young Economists in Istanbul, the International Institute of Public Finance (IIPF) 2009 conference in Capetown, and the 2009 Conference of the German Economic Association (Verein fuer Socialpolitik) in Magdeburg for many helpful comments. Daniel Erdsiek provided capable research assistance. Oliver Falck is indebted to the Program on Education Policy and Governance (PEPG), Kennedy School of Governance, Harvard University, and in particular to Paul Peterson and Edward Glaeser for their hospitality during the research visit that allowed work on this research, and to the Fritz Thyssen Foundation for partial funding of the research visit. Stephan Heblich received funding for the research leading to these results from the European Community’s Seventh Framework Programme (FP7/2007–2013) under Grant No. 216813.


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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  • Oliver Falck
    • 1
    • 2
  • Stephan Heblich
    • 3
  • Elke Luedemann
    • 1
  1. 1.Ifo Institute for Economic ResearchMunichGermany
  2. 2.CESifoMunichGermany
  3. 3.Max Planck Institute of EconomicsEntrepreneurship, Growth, and Public Policy GroupJenaGermany

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