Hiring plans by solo entrepreneurs at the time of start-up: The role of education and the desire for self-expression

Stel, André van; Kaciak, Eugène; Cieślik, Jerzy

doi:10.1016/j.jbusres.2020.06.060

Cited by 12 publications

(11 citation statements)

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“…Many solo entrepreneurs are well aware of the risks and challenges related to taking on employees, and do not have the ambition to hire personnel. Van Stel et al (2020) report that among a representative sample of solo entrepreneurs in Poland who were interviewed at the time of business start-up, only 34% indicated to foresee hiring employees at some point in the future of their new business, while 66% did not have such hiring plans. Hence, given our focus in this paper on overconfidence among solo entrepreneurs, the EOC1þ measure as defined above is particularly relevant.…”

Section: Measuring Eoc: Our Approachmentioning

confidence: 99%

“…First, entrepreneurs who start a business without employees may have become entrepreneurs for different reasons than those starting out with employees. In particular, non-financial motivations such as autonomy and selfexpression may be more important for the solo self-employed (Van Gelderen and Jansen, 2006;Van Stel et al, 2020). Second, the solo self-employed form a heterogeneous group of workers (Cie slik and Dvoulety, 2019;Gevaert et al, 2022), ranging from precarious solo self-employed to highly productive, high earning freelancers (Burke and Cowling, 2020b).…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Overconfidence among solo entrepreneurs: the role of national culture

Cieślik

Nolan

O'Hagan‐Luff

et al. 2023

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PurposeThis study investigates entrepreneurial overconfidence (EOC) levels among solo entrepreneurs at the country level. Although transitions from solo to employer entrepreneur are relatively rare, the solo self-employed have become an important source of potential job creation by virtue of the sharp increase in their numbers in the past two decades. When EOC levels are too high, job creation ambitions may be unrealistic and unrealised. Unrealised ambitions and business failure can lead not only to psychological and financial costs for the individual entrepreneurs involved, but at the societal level also to wasted government resources, and increased costs for the entrepreneurial ecosystem as a whole. Therefore, it is important to know more about the entrepreneurial overconfidence levels of solo entrepreneurs in different countries and their determinants.Design/methodology/approachUsing Global Entrepreneurship Monitor data for 71 countries over the period 2013–2016, the authors construct a new measure of entrepreneurial overconfidence of solo entrepreneurs and relate this to three recently developed indicators of national culture.FindingsThe findings indicate that EOC levels are positively related to Joy (versus Duty), and negatively related to Trust (versus Distrust). Finally, no significant relationship between entrepreneurial overconfidence and Individualism is found in the study (versus Collectivism).Research limitations/implicationsGiven the lack of literature examining the relationship between EOC levels and cultural variables hypotheses were developed using the existent body of knowledge in the area, which is at the early stage of development. The hypotheses derivation has used mostly theoretical arguments relating to the link between national culture and overconfidence of entrepreneurs in general, rather than relating specifically to solo entrepreneurs. The measure of EOC uses expectations of employment growth to proxy overconfidence, but other measures of entrepreneurial success may also be explored.Practical implicationsAs the hiring of employees can be a costly process (Coad et al., 2017), it is important that entrepreneurs have realistic expectations of what it requires to hire employees. This is especially the case for solo entrepreneurs since they do not have experience of hiring their own employees. This paper addresses such issues at an aggregate level by exploring what factors explain country differences in overconfidence levels of solo entrepreneurs.Social implicationsIt is worthwhile to distinguish between solo and employer entrepreneurs when studying their EOC levels, as the ambitions of these two types of entrepreneurs are different. Empirically, this study introduces a new measure of EOC tailored towards the solo self-employed.Originality/valueThis study contributes to entrepreneurship literature by expanding current knowledge on entrepreneurial overconfidence at the country level. Past research has studied EOC at the individual level, however limited research exists on the phenomenon of EOC from a country level perspective. This is important as unrealised entrepreneurial ambitions may not only create substantial costs for the individual entrepreneurs involved, it may also lead to substantial societal costs, including waste of government resources.

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Section: Measuring Eoc: Our Approachmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Overconfidence among solo entrepreneurs: the role of national culture

Cieślik

Nolan

O'Hagan‐Luff

et al. 2023

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“…According to OECD data (https:// www.oecd-ilibrary.org), the majority of organisations (70-95%) in any country are micro (fewer than 10 employees) and small (10-49 employees) enterprises; only a very small percentage are medium-sized (50-249 employees) and large (250 or more employees). At the other end of the spectrum, firms with no employees (the so-called solo self-employed) (Van Stel et al, 2020) are governed by particular context-specific factors which set them apart from firms that employ at least one person. In view of these considerations, we eventually targeted owners of micro and small businesses, excluding solo entrepreneurs, as well as owner-managers of medium-sized and large organisations.…”

Section: Samplementioning

confidence: 99%

Family- and non-family-related reasons for entrepreneurial exits

Koładkiewicz

Kaciak

Wojtyra-Perlejewska

2022

BJM

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PurposeThis study examines the family- and non-family-related reasons that may determine the choice of the anticipated entrepreneurial exit strategy (exit intention).Design/methodology/approachThe study is based on a survey of 267 owner-managers of micro-and small-sized firms in Poland and focuses on their exit intentions (rather than actual actions) as precursors to entrepreneurial exit. Structural equation modelling (SEM) was used to test the hypotheses.FindingsThe results show that family-related reasons may encourage entrepreneurs to choose the stewardship strategy over the financial harvest or voluntary cessation strategies, while non-family-related reasons such as maintaining financial independence and health may encourage the choice of the financial harvest or the voluntary cessation strategy.Originality/valueThis research contributes to both the entrepreneurial exit literature and psychological ownership theory by demonstrating the potential relevance of psychological ownership in the selection of exit strategies.

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“…The hiring expectations of solo entrepreneurs have been studied by Van Stel et al (2020), who concluded that solo entrepreneurs with high educational levels tend to have low hiring intentions and that these low intentions are due to the need for autonomy and self-expression or self-realization. Darnihamedani and Terjesen (2020) analyzed the hiring expectations of entrepreneurs from the perspective of regulatory efficiency, composed of business freedom, labor freedom, and monetary freedom.…”

Section: Job Creation Expectationmentioning

confidence: 99%

Cross-country differences in drivers of female necessity entrepreneurship

et al. 2021

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This paper analyzes the drivers of female necessity entrepreneurship using a sample of 59 countries, with data sourced from the 2018–2019 global entrepreneurship monitor (GEM). It develops a theoretical framework describing how post-secondary education, startup skills, fear of failure, knowing another entrepreneur, entrepreneurial intentions, and hiring expectations act as drivers of female necessity entrepreneurship. Using qualitative comparative analysis, two models are tested to explain the presence and absence of female necessity entrepreneurship. This outcome is measured using the GEM indicator of total early-stage entrepreneurial activity.

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Hiring plans by solo entrepreneurs at the time of start-up: The role of education and the desire for self-expression

Cited by 12 publications

References 48 publications

Overconfidence among solo entrepreneurs: the role of national culture

Overconfidence among solo entrepreneurs: the role of national culture

Family- and non-family-related reasons for entrepreneurial exits

Cross-country differences in drivers of female necessity entrepreneurship

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