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Personality characteristics and the decision to hire

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

Abstract

As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to understand whether the personality of entrepreneurs drives the first hiring in their firms. Using the German Socio-Economic Panel (SOEP), we analyze to what extent personality traits influence the probability of becoming an employer. The results indicate that personality matters. Risk tolerance unfolds the strongest influence on hiring, shortening the time until entrepreneurs hire their first employee; the effect size of a one-standard-deviation increase in risk tolerance is similar to that of having a university degree. Moreover, individuals who are more open to experience, more conscientious, and more trustful are more likely to hire upon establishing their business.

Suggested Citation

  • Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2022. "Personality characteristics and the decision to hire," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 31(3), pages 736-761.
  • Handle: RePEc:zbw:espost:280272
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    Cited by:

    1. Runst, Petrik & Thomä, Jörg, 2023. "Personality and self-employment: A journey into the craft's way of doing business," ifh Working Papers 38/2023, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh), revised 2023.
    2. Block, Joern & Kritikos, Alexander S. & Priem, Maximilian & Stiel, Caroline, 2022. "Emergency-aid for self-employed in the Covid-19 pandemic: A flash in the pan?," Journal of Economic Psychology, Elsevier, vol. 93(C).
    3. Marco Caliendo & Alexander S. Kritikos & Daniel Rodríguez & Claudia Stier, 2023. "Self-efficacy and entrepreneurial performance of start-ups," Small Business Economics, Springer, vol. 61(3), pages 1027-1051, October.
    4. Marco Caliendo & Alexander S. Kritikos & Claudia Stier, 2023. "The influence of start-up motivation on entrepreneurial performance," Small Business Economics, Springer, vol. 61(3), pages 869-889, October.
    5. Petrik Runst & Jörg Thomä, 2023. "Resilient entrepreneurs? — revisiting the relationship between the Big Five and self-employment," Small Business Economics, Springer, vol. 61(1), pages 417-443, June.
    6. Cockx, Bart & Desiere, Sam, 2024. "Labour costs and the decision to hire the first employee," European Economic Review, Elsevier, vol. 170(C).
    7. Vera Rocha & Luca Grilli, 2024. "Early-stage start-up hiring: the interplay between start-ups’ initial resources and innovation orientation," Small Business Economics, Springer, vol. 62(4), pages 1641-1668, April.
    8. Fossen, Frank M. & McLemore, Trevor & Sorgner, Alina, 2024. "Artificial Intelligence and Entrepreneurship," IZA Discussion Papers 17055, Institute of Labor Economics (IZA).
    9. Frank M. Fossen & Levent Neyse, 2024. "Entrepreneurship, Management, and Cognitive Reflection: A Preregistered Replication Study With Extensions," Entrepreneurship Theory and Practice, , vol. 48(4), pages 1082-1109, July.

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    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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