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

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 G. Sandner

Frankfurt School of Finance & Management

Frank Spiegel

Technische Universität München (TUM)

Date Written: September 15, 2009

Abstract

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

Block, Jorn Hendrich and Sandner, Philipp and Spiegel, Frank, How Do Risk Attitudes Differ Within The Group of Entrepreneurs? The Role of Motivation and Procedural Utility (September 15, 2009). Journal of Small Business Management, Vol. 53, No. 1, pp. 183-206, 2015, Available at SSRN: https://ssrn.com/abstract=1473989 or http://dx.doi.org/10.2139/ssrn.1473989

Jorn Hendrich Block (Contact Author)

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 Sandner

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

HOME PAGE: http://www.philipp-sandner.de

Frank Spiegel

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

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