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

Referierte Aufsätze Web of Science

Marco Caliendo, Frank M. Fossen, Alexander S. Kritikos

In: Small Business Economics 42 (2014), 4, S. 787-814


Based on a large, representative German household panel, we investigate to what extent the personality of individuals influences the entry decision into and the exit decision from self-employment. We reveal that some traits, such as openness to experience, extraversion, and risk tolerance affect entry, but different ones, such as agreeableness or different parameter values of risk tolerance, affect exit from self-employment. Only locus of control has a similar influence on the entry and exit decisions. The explanatory power of all observed traits among all observable variables amounts to 30 %, with risk tolerance, locus of control, and openness having the highest explanatory power.

JEL-Classification: D81;J23;M13;L26
Keywords: Entrepreneurship, Personality, Big five, Risk tolerance, Locus of control