Arbeitspapier

Risk attitudes and private business equity

Why do people engage in entrepreneurship and commit large parts of their personal wealth to their business, despite comparably low returns and high risk? This paper connects several streams of literature to shed some light on this puzzle and suggests possible future research avenues. Key insights from the literature are that entrepreneurs may operate in imperfect financial markets and that entrepreneurs are less risk-averse than the rest of the population. A focus of this paper is, therefore, on the role of heterogeneous risk attitudes in entrepreneurial decisions, specifically portfolio choice and the entry and exit decisions. Nonpecuniary benefits of entrepreneurship, such as being independent in the workplace, also contribute to an explanation of entrepreneurial behavior.

Language
Englisch

Bibliographic citation
Series: DIW Discussion Papers ; No. 1209

Classification
Wirtschaft
Labor Demand
Portfolio Choice; Investment Decisions
Entrepreneurship
Subject
Entrepreneurship
risk aversion
portfolio choice

Event
Geistige Schöpfung
(who)
Fossen, Frank M.
Event
Veröffentlichung
(who)
Deutsches Institut für Wirtschaftsforschung (DIW)
(where)
Berlin
(when)
2012

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Fossen, Frank M.
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Time of origin

  • 2012

Other Objects (12)