Do Attitudes toward Risk Taking Affect Entrepreneurship? Evidence from Second-Generation Americans

38 Pages Posted: 26 Nov 2019

See all articles by Areendam Chanda

Areendam Chanda

Louisiana State University, Baton Rouge - Department of Economics

Bulent Unel

Louisiana State University, Baton Rouge

Date Written: November 4, 2019

Abstract

This paper empirically investigates the impact of willingness to take risks on the likelihood of being an entrepreneur. We use a quarter-century of data on second-generation Americans from Current Population Surveys in conjunction with country-level measures of willingness to take risks from the Global Preference Survey. The average level of risk taking in the country of origin is found to have a positive and significant impact on the likelihood of being an entrepreneur. A one-standard deviation increase in risk taking increases the probability of being an entrepreneur by 15 percent. We also examine other preferences and cultural measures including trust, patience, and individualism. We find that these do not have an impact on entrepreneurship, while risk taking continues to be significant.

Keywords: entrepreneurship, immigrants, second-generation Americans, risk taking, preference measures, occupational choice, comparative development

JEL Classification: J20, J24, J61, L26, Z10

Suggested Citation

Chanda, Areendam and Unel, Bulent, Do Attitudes toward Risk Taking Affect Entrepreneurship? Evidence from Second-Generation Americans (November 4, 2019). Available at SSRN: https://ssrn.com/abstract=3480895 or http://dx.doi.org/10.2139/ssrn.3480895

Areendam Chanda (Contact Author)

Louisiana State University, Baton Rouge - Department of Economics ( email )

Department of economics
Baton Rouge, LA 70803-6308
United States
225-578-3791 (Phone)

Bulent Unel

Louisiana State University, Baton Rouge ( email )

Department of Economics
2134 Patrick F. Taylor Hall
Baton Rouge, LA 70803
United States

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