I Can't Get No Satisfaction: Necessity Entrepreneurship and Procedural Utility
Jorn H. Block
University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)
Erasmus School of Economics; Tinbergen Institute; Erasmus Research Institute of Management (ERIM)
August 20, 2008
Kyklos, Vol. 62, No. 2, pp. 191-209, April 2009
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.
Number of Pages in PDF File: 26
Keywords: Entrepreneurship, Satisfaction, Procedural Utility, Unemployment, Necessity Entrepreneurship
JEL Classification: J24, J17, L26Accepted Paper Series
Date posted: August 21, 2008 ; Last revised: September 6, 2010
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