I Can't Get No Satisfaction: Necessity Entrepreneurship and Procedural Utility

Kyklos, Vol. 62, No. 2, pp. 191-209, April 2009

26 Pages Posted: 21 Aug 2008 Last revised: 6 Sep 2010

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Philipp Koellinger

Erasmus School of Economics; Erasmus Research Institute of Management (ERIM); University of Amsterdam Business School

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Date Written: August 20, 2008

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.

Keywords: Entrepreneurship, Satisfaction, Procedural Utility, Unemployment, Necessity Entrepreneurship

JEL Classification: J24, J17, L26

Suggested Citation

Block, Jorn H. and Koellinger, Philipp, I Can't Get No Satisfaction: Necessity Entrepreneurship and Procedural Utility (August 20, 2008). Kyklos, Vol. 62, No. 2, pp. 191-209, April 2009. Available at SSRN: https://ssrn.com/abstract=1240822

Jorn Hendrich Block (Contact Author)

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Philipp Koellinger

Erasmus School of Economics ( email )

Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

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