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

19 Pages Posted: 27 Apr 2009

See all articles by Jorn H. Block

Jorn H. Block

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

Philipp Koellinger

Vrije Universiteit Amsterdam

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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. We show that the process leading to a decision has an impact on the later satisfaction with the outcome of that decision.

Suggested Citation

Block, Jorn Hendrich and Koellinger, Philipp, I Can't Get No Satisfaction - Necessity Entrepreneurship and Procedural Utility. Kyklos, Vol. 62, Issue 2, pp. 191-209, April 2009. Available at SSRN: https://ssrn.com/abstract=1395053 or http://dx.doi.org/10.1111/j.1467-6435.2009.00431.x

Jorn Hendrich Block

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

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

HOME PAGE: http://www.philipp-koellinger.com

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