The Economic Psychology of Entrepreneurship and Family Business

22 Pages Posted: 5 Apr 2013

See all articles by Manju Puri

Manju Puri

Duke University - Fuqua School of Business; NBER; FDIC

David T. Robinson

Fuqua School of Business, Duke University; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Date Written: Summer 2013

Abstract

This paper studies the attitudes of entrepreneurs, both how they differ as a group from others in the economy, as well as how they differ from one another according to the mode of entry into entrepreneurship and whether or not the firm is a family business. We use data from the Survey of Consumer Finance to measure and isolate the enjoyment of private benefits, attitudes toward risk, and optimism for these groups. Entrepreneurs are more optimistic and enjoy the nonpecuniary benefits of work more than wage earners. They embrace risk, but perhaps less so than commonly believed, as their riskā€bearing is tempered by longer planning horizons. Family business owners share optimism and nonpecuniary benefits with other entrepreneurs; their tolerance for risk is not different than wage earners. In contrast, those who inherit businesses are significantly less risk tolerant than nonentrepreneurs, are no more optimistic than nonentrepreneurs, but seem to derive more nonpecuniary benefits from work than others. Simply possessing these entrepreneurial traits translate into actions, increasing the amount of time spent at work, even among those who are not entrepreneurs.

Suggested Citation

Puri, Manju and Robinson, David T., The Economic Psychology of Entrepreneurship and Family Business (Summer 2013). Journal of Economics & Management Strategy, Vol. 22, Issue 2, pp. 423-444, 2013. Available at SSRN: https://ssrn.com/abstract=2245425 or http://dx.doi.org/10.1111/jems.12013

Manju Puri (Contact Author)

Duke University - Fuqua School of Business ( email )

100 Fuqua Drive
Box 90120
Durham, NC 27708-0120
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919-660-7657 (Phone)

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
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FDIC ( email )

550 17th Street NW
Washington, DC 20429
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David T. Robinson

Fuqua School of Business, Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0120
United States
919-660-8023 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

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