Over-optimism and entry and exit from self-employment

Dawson, Chris; Henley, Andrew

Abstract

This article develops a conceptual framework for addressing the relationship between over-optimism and entry into, and survival in, self-employed business ownership. Previous research has rarely examined over-optimism and the dynamics of business ownership. Using a large-scale British longitudinal survey, the relationship between over-optimism and self-employment transitions is investigated. The results show that over-optimism is associated with higher transition into business ownership. However, over-optimism at the point of entry is also associated with lower rates of subsequent duration in business ownership, despite the possibility that exits may be slowed by threshold inertia and non-financial motives for remaining self-employed. © The Author(s) 2012.

• Journal Article Type: Article
• Publication Date: Dec 1, 2013
• Journal: International Small Business Journal
• Print ISSN: 0266-2426
• Electronic ISSN: 1741-2870
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 31
• Issue: 8
• Pages: 938-954
• DOI: https://doi.org/10.1177/0266242612445462
• Keywords: expectations, longitudinal data, over-optimism, self-employment entry and exit
• Public URL: https://uwe-repository.worktribe.com/output/945738
• Publisher URL: http://dx.doi.org/10.1177/0266242612445462