Personality and Entrepreneurial Development

Summary

Entrepreneurs play a crucial role in driving economic growth and innovation, making it essential to uncover the factors that influence the success of their ventures. This research project examined how the motivations and personalities of business founders impact their entrepreneurial development. In the first part of the project, we explore the different motives that drive entrepreneurs in starting their businesses and investigate whether these motives have a lasting impact. We find that start-up motives not only affect the survival and income of a business but especially also growth-oriented outcomes like job creation and innovation activities. In a next step we provide first evidence on the longer-term business and innovation potential of subsidized start-ups from unemployment and contribute to the ongoing critical debate about the benefits and concerns related to this type of public policy. We find that the subsidized start-ups perform worse than regular founders, especially in terms of job creation and innovation activities. Entrepreneurial persistence, which we examine in a different part of the project, could be one contributing factor in explaining this finding, as the share of founders that are highly committed to entrepreneurship is lower among those who were previously unemployed. One policy implication is that additional soft support measures such as coaching, counselling, mentoring, or training during the pre- or early-start-up phase might be needed to improve commitment and, henceforth, business potential and long-term development. Shifting focus to the personality of entrepreneurs, the research project investigates how personality characteristics like risk tolerance, trust, and openness impact the decision to hire the first employee. These personality factors are found to significantly influence this critical decision, providing valuable insights for policies supporting business expansion. Considering self-efficacy, reflecting the self-belief that one can persistently perform difficult and novel tasks while coping with adversity, we find that entrepreneurs with higher self-efficacy tend to perform better. This includes aspects like innovation, job creation, and overall business growth. The project concludes by looking at divergent thinking, or the ability to generate diverse ideas. This trait is found to positively influence post-launch outcomes like innovation and growth, but the relationship is not always linear. Additionally, we show that such effects are moderated by the type of domain-specific experience that entrepreneurs gathered pre-launch. In summary, this research project has contributed decisively to understanding the determinants of entrepreneurial development. It was found that factors such as motivation, persistence and personality traits of entrepreneurs significantly influence a broad range of business outcomes, and that these effects differ for different groups of founders. This not only provides valuable guidance for policymakers in designing effective support measures but also holds significant practical value for business founders and investors alike.

Publications 

• Caliendo, M. and Rodriguez, D. (2024): Divergent Thinking and Post-Launch Entrepreneurial Outcomes: Non-Linearities and the Moderating Role of Experience, Small Business Economics, 62, 1523-1553.
• Caliendo, M., Kritikos, A.S. and Stier, C. (2023): The Influence of Start-up Motivation on Entrepreneurial Performance, Small Business Economics, 61, 869-889.
• Caliendo, M., Kritikos, A.S., Rodriguez, D. and Stier, C. (2023): Self-Efficacy and Entrepreneurial Performance of Start-Ups, Small Business Economics, 61, 1027-1051.
• Caliendo, M., Fossen, F. and Kritikos, A.S. (2022): Personality Characteristics and the Decision to Hire [previous title: What Makes an Employer?], Industrial and Corporate Change, 31, 736-761.
• Caliendo, M., Künn, S. and Weißenberger, M. (2020): Catching up or Lagging Behind? The Long-Term Business and Innovation Potential of Subsidized Start-Ups out of Unemployment, Research Policy, 49(10), 1-14.
• Caliendo, M., Göthner, M. and Weißenberger, M. (2020): Entrepreneurial Persistence Beyond Survival: Measurement and Determinants, Journal of Small Business Management, 58(3), 617-647.