Authors	Caliendo, M., Fossen, F. and Kritikos, A.
Year	2010
Reference	Journal of Economic Behavior and Organization, 76(1), 45-63.
Keywords	Entrepreneurship, Risk Attitudes, Survival and Failure
JEL-Classification	D81, J23, M13
Presentations	EEA 2008, Milan.
Press Release	Jun 03, 2008: PDF See also: DIW-Wochenbericht, No. 29/2008, 409-411: PDF
Download	IZA Discussion Paper 3525 from June 2008: PDF Substantially revised version from June 2010 available on request.
Abstract	Risk attitudes have an impact on not only the decision to become an entrepreneur but also the survival and failure rates of entrepreneurs. Whereas recent research underpins the theoretical proposition of a positive correlation between risk attitudes and the decision to become an entrepreneur, the effects on survival are not as straightforward. Psychological research posits an inverse U-shaped relationship between risk attitudes and entrepreneurial survival. On the basis of recent waves of the German Socio-Economic Panel (SOEP), we examine the extent to which risk attitudes influence survival rates of entrepreneurs. The empirical results confirm that persons whose risk attitudes are in the medium range survive significantly longer as entrepreneurs than do persons with particularly low or high risks.