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Vortrag
Non-cognitive Skills and the Economics of Entrepreneurial Decision Making

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


66th European Meeting of the Econometric Society ESEM
Malaga, Spanien, 27.08.2012 - 31.08.2012


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Abstract:
Based on a large, representative German household panel, this paper investigates whether non-cognitive skills influence entrepreneurial decision making, in particular the entry and exit decision, the latter one thus capturing entrepreneurial survival. The analysis reveals that there are some variables that affect the economic decision of becoming an entrepreneur and different ones or different parameter values of the same variable affecting the life span as an entrepreneur. The explanatory power of non-cognitive skills among all observable variables amounts to almost 30%, with risk tolerance, locus of control and openness to experience being overall the most important variables.

Abstract

Based on a large, representative German household panel, this paper investigates whether non-cognitive skills influence entrepreneurial decision making, in particular the entry and exit decision, the latter one thus capturing entrepreneurial survival. The analysis reveals that there are some variables that affect the economic decision of becoming an entrepreneur and different ones or different parameter values of the same variable affecting the life span as an entrepreneur. The explanatory power of non-cognitive skills among all observable variables amounts to almost 30%, with risk tolerance, locus of control and openness to experience being overall the most important variables.



JEL-Classification: D81;J23;M13;L26
Keywords: Non-cognitive Skills, Risk Tolerance, Locus of Control
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