Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2008-09-02
Number: 08-078/3
Author-Name: Joern Block
Author-Email: block@wi.tum.de
Author-Workplace-Name: Technische Universität München
Author-Name: Philipp Koellinger
Author-Email: koellinger@few.eur.nl
Author-Workplace-Name: Erasmus University Rotterdam
Title: I can't get no Satisfaction - Necessity Entrepreneurship and Procedural Utility
Abstract: We study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their self-reported satisfaction regarding their start-up. Our study identifies a new facet of procedural utility and offers new insights about the motivations and goals of nascent entrepreneurs. Most importantly, we identify a group of nascent entrepreneurs that “cannot get satisfaction” with their start-up—not because their start-up fails to deliver financial returns, but because they did not choose to become entrepreneurs in the first place. This group of unsatisfied entrepreneurs includes individuals starting a business after a period of long-term unemployment and those individuals with a lack of better employment alternatives (necessity entrepreneurs). In addition, we provide additional evidence for the importance of both financial and non-financial incentives of entrepreneurs. While financial success is the most important determinant of start-up satisfaction, achievement of independence and creativity is also highly important. Our results emphasize the relevance of procedural utility for understanding economic behavior.
Classification-JEL: J24, J17, L26
Keywords: Entrepreneurship; Satisfaction; Procedural Utility; Unemployment; Necessity Entrepreneurship
File-Url: https://papers.tinbergen.nl/08078.pdf
File-Format: application/pdf
File-Size: 267156 bytes
Handle: RePEc:tin:wpaper:20080078