How Do Risk Attitudes Differ Within The Group of Entrepreneurs? The Role of Motivation and Procedural Utility
Journal of Small Business Management, Vol. 53, No. 1, pp. 183-206, 2015
46 Pages Posted: 15 Sep 2009 Last revised: 28 Jun 2015
Date Written: September 15, 2009
Starting a business involves risk and, thus, requires a risk-taking attitude. The concept of risk and entrepreneurship has been widely discussed in the entrepreneurship literature; most studies comparing entrepreneurs with non-entrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of the different types of entrepreneurs — those who pursue a new business because of opportunity and those who do so through necessity. This study aims to fill this gap. Our particular focus is on individuals’ motivations to start their businesses and the nonmonetary returns from entrepreneurship. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, those who are motivated by creativity are more risk tolerant than other entrepreneurs. The study contributes to the literature about both risk attitudes of entrepreneurs and necessity and opportunity entrepreneurship.
Keywords: Entrepreneurship, risk attitude, necessity entrepreneurship, procedural utility
JEL Classification: D81, M13
Suggested Citation: Suggested Citation