Abstract
Economic theories of entrepreneurship state that the higher risks of self-employment should be compensated by higher profits compared to income earned by those being on the payroll of firms. Yet, this seems not always the case given the evidence provided in this chapter: Self-employed accountants in Germany earn on average less than full-time employees. Only a minority earns higher profits. The evidence is reconciled with economic theory of entrepreneurship through considering situational and preferential causes. Firstly, self-employed accountants face lower risks than other professions; secondly they compensate lower earnings with higher preferences for independence and autonomy. A further factor yet not often considered in entrepreneurship research is the service portfolio offered. Accountants can influence their returns through the services they offer. A significant amount of the respondents chose less profitable services. The paper contributes to the literature on economic analysis of entrepreneurship in providing evidence not available before and on stressing the importance of evaluating peculiarities of professions as well as contexts in order to understand decisions for self-employment.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Audretsch D (2012) Entrepreneurship research. Manag Decis 50(5):755–764
Baker CR, Mikol A, Quick R (2001) Regulation of the statutory auditor in the European Union: a comparative survey of the United Kingdom, France and Germany. Eur Account Rev 10(4):763–786
Bennett RJ, Robson PA (1999) The use of external business advice by SMEs in Britain. Entrepren Reg Dev 11(2):155–180
Carsrud A, Brännback M (2011) Entrepreneurial motivations. What do we still need to know? J Small Bus Manag 49(1):9–26
Cholotta K, Drobnič S (2009) Wann ist eine Gründung erfolgreich? Facetten und Faktoren objektiven Erfolges in kleinen Unternehmen. Z KMU Entrepren 57(34):239–258
Cohen J (1988) Statistical power analysis for the behavioral sciences. Lawrence Erlbaum Associates, Hillsdale, NJ
Douglas EJ, Shepherd DA (2002) Self-employment as a career choice: attitudes, entrepreneurial intentions, and utility maximization. Entrepren Theor Pract 26(3):81–91
Everaert P, Sarens G, Rommel J (2010) Using transaction cost economics to explain outsourcing of accounting. Small Bus Econ 35(1):93–112
Faul F, Erdfelder E, Lang A, Buchner A (2007) G*Power 3: a flexible statistical power analysis program for the social, behavioral, and biomedical sciences. Behav Res Methods 39(2):175–191
Gooderham PN, Tobiassen A, Døving E, Nordhaug O (2004) Accountants as sources of business advice for small firms. Int Small Bus J 22(1):5–22
Gottschalk S, Niefert M (2013) Gender differences in business success of German start-up firms. Int J Entrepren Small Bus 18(1):15–46
Hall RE, Woodward SE (2010) The burden of the nondiversifiable risk of entrepreneurship. Am Econ Rev 100(3):1163–1194
Hamilton BH (2000) Does entrepreneurship pay? An empirical analysis of the returns to self-employment. J Polit Econ 108(3):604–631
Kitching J, Smallbone D (2012) Are freelancers a neglected form of small business? J Small Bus Enterprise Dev 19(1):74–91
Niemi L (2004) Auditor size and audit pricing: evidence from small audit firms. Eur Account Rev 13(3):541–560
Parker SC (2009) The economics of entrepreneurship. Cambridge University Press, Cambridge
Ravi Kanbur SM (1982) Entrepreneurial risk taking, inequality, and public policy: an application of inequality decomposition analysis to the general equilibrium effects of progressive taxation. J Polit Econ 90(1):1–21
Robinson PB, Sexton EA (1994) The effect of education and experience on self-employment success. J Bus Venturing 9(2):141–156
van Praag CM (2003) Business survival and success of young small business owners. Small Bus Econ 21(1):1–17
van Praag CM, Versloot PH (2007) What is the value of entrepreneurship? A review of recent research. Small Bus Econ 29(4):351–382
van Praag CM, van Witteloostuijn A, van der Sluis J (2013) The higher returns to formal education for entrepreneurs versus employees. Small Bus Econ 40(2):375–396
Acknowledgment
Author would like to thank the German association of financial and management accountants (Bundesverband der Bilanzbuchhalter und Controller BVBC e.V.) for supporting this study and Verena Fischer for help with the survey.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Rieg, R. (2014). Entrepreneurial Risk Without Return? Empirical Evidence from Self-Employed Accountants in Germany. In: Rüdiger, K., Peris Ortiz, M., Blanco González, A. (eds) Entrepreneurship, Innovation and Economic Crisis. Springer, Cham. https://doi.org/10.1007/978-3-319-02384-7_13
Download citation
DOI: https://doi.org/10.1007/978-3-319-02384-7_13
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-02383-0
Online ISBN: 978-3-319-02384-7
eBook Packages: Business and EconomicsBusiness and Management (R0)