Motives for Entrepreneurial Saving: Evidence from Sweden

43 Pages Posted: 18 Nov 2015 Last revised: 7 Nov 2016

See all articles by Fatemeh Hosseini

Fatemeh Hosseini

Tilburg University

Egle Karmaziene

University of Groningen; Swedish House of Finance

Date Written: June 1, 2016


This paper investigates the motives for the high saving rates of entrepreneurial households. We use a unique dataset that links Swedish households’ wealth and income to the financial statements of their firms. We exploit the decision to enter, stay in entrepreneurship or leave it. In comparison to the rest of the population, entrepreneurs save one percent more of their income a year before starting a business and 1.9 percent more on their personal accounts while in business. We find that the elevated saving rates among business owners are consistent with the precautionary saving motive among owners of unlimited liability firms and with investment related reasons among owners of limited liability firms. They save on their personal and business accounts. We provide suggestive evidence that entrepreneurs respond to income risk or lack of investment capital by increasing their saving rate.

Keywords: entrepreneurship, saving, income risk, business investment

JEL Classification: D14, D31, E21, E22

Suggested Citation

Hosseini, Fatemeh and Karmaziene, Egle, Motives for Entrepreneurial Saving: Evidence from Sweden (June 1, 2016). Swedish House of Finance Research Paper No. 15-17. Available at SSRN: or

Fatemeh Hosseini

Tilburg University ( email )

I 605, Fatemeh Hosseini
P.O. Box 90153
Tilburg, 5000 LE


Egle Karmaziene (Contact Author)

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV


Swedish House of Finance

Drottninggatan 98
Stockholm, 111 60

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics