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Entrepreneurship: Cause and Consequence of Financial Optimism

Dawson, Christopher; de Meza, David; Henley, Andrew; Arabsheibani, G. Reza

Authors

Christopher Dawson

David de Meza

Andrew Henley

G. Reza Arabsheibani



Abstract

© 2014 Wiley Periodicals, Inc. Extant evidence that the self-employed overestimate their returns by a greater margin than employees is consistent with two mutually inclusive possibilities. Self-employment may foster optimism or intrinsic optimists may be drawn to self-employment. Previous research is generally unable to disentangle these effects because of reliance on cross-sectional data. Using longitudinal data, this paper finds that employees who will be self-employed in the future overestimate their short-term financial wellbeing by more than those who never become self-employed. Optimism is higher still when self-employed. These results suggest that the greater optimism of the self-employed reflects both psychological disposition and environmental factors. By providing greater scope for optimism, self-employment entices the intrinsically optimistic.

Journal Article Type Article
Publication Date Jan 1, 2014
Journal Journal of Economics and Management Strategy
Print ISSN 1058-6407
Electronic ISSN 1530-9134
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 23
Issue 4
Pages 717-742
APA6 Citation Dawson, C., Dawson, C., de Meza, D., Henley, A., & Arabsheibani, G. R. (2014). Entrepreneurship: Cause and Consequence of Financial Optimism. Journal of Economics and Management Strategy, 23(4), 717-742. https://doi.org/10.1111/jems.12076
DOI https://doi.org/10.1111/jems.12076
Keywords economics, entrepreneurship, financial optimism
Publisher URL http://dx.doi.org/10.1111/jems.12076
Additional Information Additional Information : This is the pre-peer reviewed version of the following article: Dawson, C., de Meza, D., Henley, A. and Arabsheibani, G. R. (2014) Entrepreneurship: Cause and consequence of financial optimism. Journal of Economics and Management Strategy, 23 (4). pp. 717-742. ISSN 1058-6407, which has been published in final form at http://dx.doi.org/10.1111/jems.12076

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