Details
| Original language | English |
|---|---|
| Pages (from-to) | 157-161 |
| Number of pages | 5 |
| Journal | Applied economics letters |
| Volume | 20 |
| Issue number | 2 |
| Early online date | 10 May 2012 |
| Publication status | Published - Feb 2013 |
Abstract
As the high share of failed new businesses shows, the marked success of new firms is still rather low. Hence, enhancing the quality of new firms is an important goal of entrepreneurship support policies. Schemes that give professional assistance to individuals who want to start up a business are a key feature of most developed countries' policies towards improving the performance of new firms. In our sample, only approximately half of nascent entrepreneurs seek professional assistance. Given that assistance is highly subsidized and available to everyone interested in starting up a firm, we ask why certain nascent entrepreneurs do not seek assistance. By using survey data consisting of an initial screening interview and a follow-up interview after 1 year, we are able to show that men and well-educated founders tend to refrain from professional assistance. Notably, those without any experience in the industry of the planned business are more apt not to seek assistance. This finding suggests that cognitive biases such as overconfidence might play a role in explaining the assistance-avoiding behaviour. Policy measures aiming at improving the knowledge of potential entrepreneurs are therefore well advised to target well-educated males in particular.
Keywords
- cognitive biases, German panel of nascent entrepreneurs, nascent entrepreneurs, start-up assistance
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Applied economics letters, Vol. 20, No. 2, 02.2013, p. 157-161.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Why some nascent entrepreneurs do not seek professional assistance
AU - Brixy, U.
AU - Sternberg, R.
AU - Stüber, H.
N1 - Copyright: Copyright 2012 Elsevier B.V., All rights reserved.
PY - 2013/2
Y1 - 2013/2
N2 - As the high share of failed new businesses shows, the marked success of new firms is still rather low. Hence, enhancing the quality of new firms is an important goal of entrepreneurship support policies. Schemes that give professional assistance to individuals who want to start up a business are a key feature of most developed countries' policies towards improving the performance of new firms. In our sample, only approximately half of nascent entrepreneurs seek professional assistance. Given that assistance is highly subsidized and available to everyone interested in starting up a firm, we ask why certain nascent entrepreneurs do not seek assistance. By using survey data consisting of an initial screening interview and a follow-up interview after 1 year, we are able to show that men and well-educated founders tend to refrain from professional assistance. Notably, those without any experience in the industry of the planned business are more apt not to seek assistance. This finding suggests that cognitive biases such as overconfidence might play a role in explaining the assistance-avoiding behaviour. Policy measures aiming at improving the knowledge of potential entrepreneurs are therefore well advised to target well-educated males in particular.
AB - As the high share of failed new businesses shows, the marked success of new firms is still rather low. Hence, enhancing the quality of new firms is an important goal of entrepreneurship support policies. Schemes that give professional assistance to individuals who want to start up a business are a key feature of most developed countries' policies towards improving the performance of new firms. In our sample, only approximately half of nascent entrepreneurs seek professional assistance. Given that assistance is highly subsidized and available to everyone interested in starting up a firm, we ask why certain nascent entrepreneurs do not seek assistance. By using survey data consisting of an initial screening interview and a follow-up interview after 1 year, we are able to show that men and well-educated founders tend to refrain from professional assistance. Notably, those without any experience in the industry of the planned business are more apt not to seek assistance. This finding suggests that cognitive biases such as overconfidence might play a role in explaining the assistance-avoiding behaviour. Policy measures aiming at improving the knowledge of potential entrepreneurs are therefore well advised to target well-educated males in particular.
KW - cognitive biases
KW - German panel of nascent entrepreneurs
KW - nascent entrepreneurs
KW - start-up assistance
UR - http://www.scopus.com/inward/record.url?scp=84861922562&partnerID=8YFLogxK
U2 - 10.1080/13504851.2012.684783
DO - 10.1080/13504851.2012.684783
M3 - Article
AN - SCOPUS:84861922562
VL - 20
SP - 157
EP - 161
JO - Applied economics letters
JF - Applied economics letters
SN - 1350-4851
IS - 2
ER -