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Risk attitudes and entrepreneurial motivations: Evidence from transition economies

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  • Ahunov, Muzaffar
  • Yusupov, Nurmukhammad

Abstract

Most studies on risk attitudes of entrepreneurs do not distinguish between those who want to be self-employed and those who have to run their own business for survival, or entrepreneurs by choice vs. by necessity. We examine the relationship between individual risk preferences and likelihood of entrepreneurial entry among these two groups in a cross section of countries with transition economies. We obtain robust results that those with higher degree of risk tolerance are more likely to be self-employed by choice.

Suggested Citation

  • Ahunov, Muzaffar & Yusupov, Nurmukhammad, 2017. "Risk attitudes and entrepreneurial motivations: Evidence from transition economies," Economics Letters, Elsevier, vol. 160(C), pages 7-11.
    • Handle: RePEc:eee:ecolet:v:160:y:2017:i:c:p:7-11
    DOI: 10.1016/j.econlet.2017.08.016
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    References listed on IDEAS

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    1. David N Margolis, 2014. "By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 26(4), pages 419-436, September.
    2. Joern Block & Philipp Koellinger, 2009. "I Can't Get No Satisfaction—Necessity Entrepreneurship and Procedural Utility," Kyklos, Wiley Blackwell, vol. 62(2), pages 191-209, April.
    3. Fossen, Frank M. & Büttner, Tobias J.M., 2013. "The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees," Economics of Education Review, Elsevier, vol. 37(C), pages 66-84.
    4. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    5. Ekelund, Jesper & Johansson, Edvard & Jarvelin, Marjo-Riitta & Lichtermann, Dirk, 2005. "Self-employment and risk aversion--evidence from psychological test data," Labour Economics, Elsevier, vol. 12(5), pages 649-659, October.
    6. repec:hal:pseose:hal-01060265 is not listed on IDEAS
    7. Ahn, Taehyun, 2010. "Attitudes toward risk and self-employment of young workers," Labour Economics, Elsevier, vol. 17(2), pages 434-442, April.
    8. Tyrowicz, Joanna, 2011. "What distinguishes entrepreneurs? Evidence on the motives for self-employment," Economics Letters, Elsevier, vol. 112(3), pages 226-229, September.
    9. Brown, Sarah & Dietrich, Michael & Ortiz-Nuñez, Aurora & Taylor, Karl, 2011. "Self-employment and attitudes towards risk: Timing and unobserved heterogeneity," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 425-433, June.
    10. Edward L. Glaeser, 2007. "Entrepreneurship and the City," NBER Working Papers 13551, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Murat Yalcintas & Oyk㜠Iyigãœn & Gokhan Karabulut, 2023. "Personal Characteristics And Intention For Entrepreneurship," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(02), pages 539-561.
    2. Zimei Liu & Yezhi Ren & Yanlan Mei, 2022. "How Does Internet Use Promote Farmer Entrepreneurship: Evidence from Rural China," Sustainability, MDPI, vol. 14(24), pages 1-15, December.
    3. Muzaffarjon Ahunov & Dilnovoz Abdurazzakova & Nurmukhammad Yusupov, 2019. "Who creates jobs in transition economies? The role of entrepreneurial risk preferences," Economics Bulletin, AccessEcon, vol. 39(3), pages 1876-1886.
    4. Xiaofen Yu & Dingpei Hu & Mingzhi Hu, 2024. "Unveiling the impact of housing debt on entrepreneurship: Evidence from China," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 11(2), May.
    5. Bach Nguyen & Christophe Schinckus & Nguyen Phuc Canh & Su Dinh Thanh, 2021. "Economic Policy Uncertainty and Entrepreneurship: A Bad for a Good?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 81-133, March.

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