Koellinger, Ph.D.

The Molecular Genetic Architecture of Self-Employment (Article)

2013-04-04T00:00:00Z

Economic variables such as income, education, and occupation are known to affect mortality and morbidity, such as cardiovascular disease, and have also been shown to be partly heritable. However, very little is known about which genes influence economic variables, although these genes may have both a direct and an indirect effect on health. We report results from the first large-scale collaboration that studies the molecular genetic architecture of an economic variable-entrepreneurship-that was operationalized using self-employment, a widely-available proxy. Our results suggest that common SNPs when considered jointly explain about half of the narrow-sense heritability of self-employment estimated in twin data (σg2/σP2= 25%, h2= 55%). However, a meta-analysis of genome-wide association studies across sixteen studies comprising 50,627 participants did not identify genome-wide significant SNPs. 58 SNPs with p<10-5were tested in a replication sample (n = 3,271), but none replicated. Furthermore, a gene-based test shows that none of the genes that were previously suggested in the literature to influence entrepreneurship reveal significant associations. Finally, SNP-based genetic scores that use results from the meta-analysis capture less than 0.2% of the variance in self-employment in an independent sample (p≥0.039). Our results are consistent with a highly polygenic molecular genetic architecture of self-employment, with many genetic variants of small effect. Although self-employment is a multi-faceted, heavily environmentally influenced, and biologically distal trait, our results are similar to those for other genetically complex and biologically more proximate outcomes, such as height, intelligence, personality, and several diseases.

Self-Employed but Looking: A Labor Market Experiment (Research Paper)

2012-12-06T00:00:00Z

Empirical studies have shown that entrepreneurs earn, on average, less than the market wage for employees with otherwise similar characteristics. We examine whether having previously been self-employed is in itself a negative signal on the job market. In a field experiment where two applications of otherwise equally qualified individuals were sent for the same vacancies, we find that entrepreneurs systematically receive fewer responses than non-entrepreneurs. Thus, it appears that the earnings differential is partially explained by the fact that entrepreneurs do not have access to the reference jobs in practice. We discuss what type of unfavorable information self-employment may carry.

In the Mood for Risk? An Experiment Addressing the Effects of Moods on Risk Preferences (Research Paper)

2012-08-07T00:00:00Z

We investigate the hypothesis that moods can cause temporary fluctuations in risk preferences. In particular, we conduct an economic experiment that first uses standard psychological tools to manipulate individuals’ moods with film clips that induce joy, fear, or sadness and then measures the risk preferences of these individuals and compares these preferences to the preferences of a control group that did not receive a mood induction. Our experiment uses a choice-based measure of risk preferences in the win domain and differentiates among nonexistent, low, and very high financial stakes. We find evidence that sad moods induce risk aversion, although this phenomenon only occurs if the financial stakes are absent or low. We do not find evidence that moods influence risk preferences under high-stakes conditions. The observed sensitivity to variations in the financial incentives in our study reinforces the value of incentive-compatible study designs.

The genetic architecture of economic and political preferences (Article)

2012-05-22T00:00:00Z

Preferences are fundamental building blocks in all models of economic and political behavior. We study a new sample of comprehensively genotyped subjects with data on economic and political preferences and educational attainment. We use dense single nucleotide polymorphism (SNP) data to estimate the proportion of variation in these traits explained by common SNPs and to conduct genome-wide association study (GWAS) and prediction analyses. The pattern of results is consistent with findings for other complex traits. First, the estimated fraction of phenotypic variation that could, in principle, be explained by dense SNP arrays is around one-half of the narrow heritability estimated using twin and family samples. The molecular-genetic-based heritability estimates, therefore, partially corroborate evidence of significant heritability from behavior genetic studies. Second, our analyses suggest that these traits have a polygenic architecture, with the heritable variation explained by many genes with small effects. Our results suggest that most published genetic association studies with economic and political traits are dramatically underpowered, which implies a high false discovery rate. These results convey a cautionary message for whether, how, and how soon molecular genetic data can contribute to, and potentially transform, research in social science. We propose some constructive responses to the inferential challenges posed by the small explanatory power of individual SNPs.

Entrepreneurship and organization design (Article)

2012-05-01T00:00:00Z

We model entrepreneurship and the emergence of firms as an outcome of simultaneous bidding for labor services among heterogeneous agents. What distinguishes our approach from prior work is that occupational choice and job matching are determined simultaneously, so that the opportunity costs of entrepreneurs are accounted for. Those who are relatively unmanageable, while possibly excellent managers themselves, become entrepreneurs. Entrepreneurs compete and create value by building efficient organizations and offering potentially well-paid jobs to others. While the entry of an additional entrepreneur typically reduces some individual wages, we show that it always raises the average wage and depresses the average income of incumbent entrepreneurs. This result may help explain the empirically low returns to entrepreneurship.

Entrepreneurship and Organization Design (Research Paper)

2012-02-23T00:00:00Z

We model entrepreneurship and the emergence of rms as an out- come of simultaneous bidding for labor services among heterogeneous agents. What distinguishes our approach from prior work is that oc- cupational choice and job matching are determined simultaneously, so that the opportunity costs of entrepreneurs are accounted for. Those who are relatively unmanageable, while possibly excellent managers themselves, become entrepreneurs. Entrepreneurs compete and create value by building e¢ cient organizations and o¤ering potentially well- paid jobs to others. While the entry of an additional entrepreneur typically reduces some individual wages, we show that it always raises the average wage and depresses the average income of incumbent en- trepreneurs. This result may help explain the empirically low returns to entrepreneurship.

Attractive Supervisors: How Does the Gender of the Supervisor Influence the Performance of the Supervisees? (Research Paper)

2012-02-10T00:00:00Z

A series of field and laboratory experiments were conducted in which single-sex groups of male or female students competed in different intellectual tasks to earn money or university grades (N = 291). The supervisor of these groups was one of several young and attractive males or females. The results show that when the supervisor was a female, the performance of male participants was, on average, negatively influenced. Group size moderated this effect such that having a female supervisor produced a negative effect in small groups and a positive effect in large groups of male supervisees.

Joy leads to Overconfidence – and a Simple Remedy (Research Paper)

2012-01-03T00:00:00Z

Joy is a potential transient cause of overconfidence. We study its effects on absolute and relative overconfidence in an incentive compatible decision experiment. In the experiment, a general knowledge task of medium difficulty is used to measure confidence. We report two main results. First, joy indeed increases the tendency to be overconfident. Second, making an irrelevant cause of joy salient to people (i.e. by showing them a humorous movie clip) leads to well-calibrated judgments. Our results are consistent with the affect-as-information hypothesis, which suggests that affective states with a non-salient and irrelevant cause have an informative function that can lead to biased judgments. However, if the cause of the affective state is salient and obviously irrelevant (i.e. a humorous movie), the informative function is deactivated, leading to better judgments and decisions.

Gender Differences in Entrepreneurial Propensity (Article)

2011-12-22T00:00:00Z

Using data from representative population surveys in 17 countries, we find that the lower rate of female business ownership is primarily due to women's lower propensity to start businesses rather than to differences in survival rates across genders. We show that women are less confident in their entrepreneurial skills, have different social networks and exhibit higher fear of failure than men. After controlling for endogeneity, we find that these variables explain a substantial part of the gender gap in entrepreneurial activity. Although, of course, their relative importance varies significantly across countries, these factors appear to have a universal effect.

Candidate gene studies and the quest for the entrepreneurial gene (Article)

2011-10-01T00:00:00Z

Candidate gene studies of human behavior are gaining interest in economics and entrepreneurship research. Performing and interpreting these studies is not straightforward because the selection of candidates influences the interpretation of the results. As an example, Nicolaou et al. (Small Bus Econ 36:151-155, 2011) report a significant association between a common genetic variant in the DRD3 gene and the tendency to be an entrepreneur. We fail to replicate this finding using a much larger, independent dataset. In addition, we discuss the candidate gene approach and give suggestions to avoid the publication of false positives.

Protecting Against Low-Probability Disasters: The Role of Worry (Article)

2011-09-26T00:00:00Z

We carry out a large monetary stakes insurance experiment with very small probabilities of losses and ambiguous as well as exact probabilities. Many individuals do not want to pay anything for insurance whether the probabilities are given exactly or are ambiguous. Many others, however, are willing to pay surprisingly large amounts. With ambiguity, the percentage of those paying nothing is smaller and the willingness to pay (WTP) of the other individuals larger than with exact probabilities. Comparing elasticities with ambiguity, we find that worry is much more important than subjective probability in determining WTP for insurance. Furthermore, when the ambiguous loss probability is increased by a factor of 1000, it has almost no effect on WTP.

Entrepreneurship and the Business Cycle (Article)

2011-07-19T00:00:00Z

We find new empirical regularities in the business cycle in a cross-country panel of 22 OECD countries for the period 1972-2007; entrepreneurship Granger-causes the cycles of the world economy. Furthermore, the entrepreneurial cycle is positively affected by the national unemployment cycle. We discuss possible causes and implications of these findings.

De genetica van ondernemerschap (Article)

2011-04-29T00:00:00Z

genetiGenoombreed associatieonderzoek is een moderne onderzoeksmethode die het mogelijk maakt genen te vinden die geassocieerd zijn met allerlei ziekten en menselijke eigenschappen. Een samenwerkingsverband tussen de Erasmus School of Economics en het Erasmus Medisch Centrum probeert deze veelbelovende methode toe te passen op de keuze voor ondernemerschap.

Genome-wide association studies in economics and entrepreneurship research: Promises and limitations (Article)

2010-05-13T00:00:00Z

The recently developed genome-wide association study (GWAS) design enables the identification of genes specifically associated with economic outcomes such as occupational and other choices. This is a promising new approach for economics research which we aim to apply to the choice for entrepreneurship. However, due to multiple testing issues, very large sample sizes are needed to differentiate between true and false positives. For a GWAS on entrepreneurship, we expect that a sample size of at least 30,000 observations is required.

The Influence of Installed Technologies on Future Adoption Decisions: Empirical Evidence from E-Business (Research Paper)

2010-03-02T00:00:00Z

This paper studies the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries between 1994 and 2002. The results show that the probability of adoption increases with the number of previously adopted e-business technologies. Hence, the more advanced a firm is in using e-business technologies, the more likely it is to adopt additional e-business technologies, provided technologies do not substitute each other in their functionalities. This result is relevant for the marketing of new technologies, strategic planning and, from an economic perspective, for the convergence of growth across regions.

Genome-wide Association Studies and the Genetics of Entrepreneurship (Research Paper)

2010-01-15T00:00:00Z

We are currently investigating genetic influences on self-employment in an international research consortium using genome-wide association studies (GWAS). By meta-analysing results from numerous independent samples we address identification issues arising from multiple testing. To our knowledge, this is the earliest attempt to apply GWAS to an economic outcome of a relatively general nature. Our study will reveal potentials and limitations of this approach for economic research.

Genome-wide association studies in economics and entrepreneurship research: promises and limitations (Article)

2010-01-01T00:00:00Z

Genome-wide association studies and the genetics of entrepreneurship (Article)

2010-01-01T00:00:00Z

Is More Entrepreneurship better? (Research Paper)

2009-12-03T00:00:00Z

We develop a new perspective on the boundary of the firm that is consistent with the empirical observation that the share of entrepreneurs first decreases and then increases in the course of economic development. Existing theory based on transaction costs is difficult to relate to these well-established dynamics. Our approach focuses on changing incentives to specialize and adapt, in order to access complementarities that arise from diverse abilities and access to wealth. We discuss why the efficient number of entrepreneurs is bounded and changes in the course of economic development.

I can't get no satisfaction - Necessity entrepreneurship and procedural utility (Article)

2009-05-06T00:00:00Z

We study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their self-reported satisfaction regarding their start-up. Our study identifies a new facet of procedural utility and offers new insights about the motivations and goals of nascent entrepreneurs. Most importantly, we identify a group of nascent entrepreneurs that 'cannot get satisfaction' with their start-up-not because their start-up fails to deliver financial returns, but because they did not choose to become entrepreneurs in the first place. This group of unsatisfied entrepreneurs includes individuals starting a business after a period of long-term unemployment and those individuals with a lack of better employment alternatives (necessity entrepreneurs). In addition, we provide additional evidence for the importance of both financial and non-financial incentives of entrepreneurs. While financial success is the most important determinant of start-up satisfaction, achievement of independence and creativity is also highly important. Our results emphasize the relevance of procedural utility for understanding economic behavior. We show that the process leading to a decision has an impact on the later satisfaction with the outcome of that decision.

Unemployment benefits crowd out nascent entrepreneurial activity (Article)

2009-05-01T00:00:00Z

Analyzing a cross-country panel of 16 OECD countries from 2002 to 2005, we find that higher unemployment benefits crowd out nascent entrepreneurial activity. Our results hold regardless of entrepreneurial motivation (necessity or opportunity) and entrepreneurial type (imitative or innovative).

Ondernemerschap en de recessie (Article)

2009-04-03T00:00:00Z

Ondernemerschap is een belangrijk en onderschat instrument om recessies te bestrijden. Het is een voorspeller van de economische cyclus, en meer ondernemerschap leidt tot kortere recessies. Ook kunnen ondernemers het vertrouwen in het reddingsplan van de overheid vergroten.

Entrepreneurship and the Business Cycle (Research Paper)

2009-04-01T00:00:00Z

We study the cyclical pattern of entrepreneurial activity. Results across 22 OECD countries for the period 1972-2007 show that entrepreneurial activity is a leading indicator of the business cycle in a Granger-causality sense. This contradicts existing theoretical hypotheses which predict that entrepreneurship is pro-cyclical or not cyclical. We discuss the causes and implications of this finding which have immense policy relevance during the second economic crisis of the 21st century.

Entrepreneurship, firm creation, and organizational design (Research Paper)

2009-03-01T00:00:00Z

We model the emergence of organization forms in simultaneous bidding for labor services among heterogeneous agents. What distin- guishes our approach from prior work is that occupational choice and job matching are determined simultaneously, so that the opportunity costs of entrepreneurs are accounted for. Equilibrium rms are diverse in size and organization; workers turn out endogenously to be com- plements or substitutes. The organization designs are e¢ cient and maximize complementarity between agents.

Acceleration of technology adoption within firms -- Emperical evidence from e-business (Research Paper)

2009-02-03T00:00:00Z

This paper studies the diffusion of multiple related technologies among firms. The results suggest an endogenous acceleration mechanism for technology adoption: The more advanced a firm is in using a particular set of technologies, the more likely it is to adopt additional related technologies. We show that such a mechanism can occur under fairly general circumstances. If firms are not ex ante identical, the endogenous acceleration mechanism suggests a growing divergence in the technological endowment of firms in the early phases after the emergence of a new technological paradigm. The theoretical predictions are tested with a dataset that records the adoption times of various e- business technologies in a large sample of firms from 10 different industry sectors and 25 European countries. The results show that the probability of adoption increases with the number of previously adopted e-business technologies. Evidence for a growing digital divide among the companies in the sample is demonstrated for the period from 1994-2002.

Firm Formation with Complementarities: The Role of the Entrepreneur (Research Paper)

2009-01-01T00:00:00Z

We model the emergence of organization forms in a game between prospective entrepreneurs. Complementary roles arise endogenously in a way that admits a stable assignment of workers to firms. This contrasts with existing work on job matching, where stability typically requires workers to be substitutes. Our approach demonstrates that the labor market selection of entrepreneurs and their profit-maximizing choices lead to specific technologies in which certain workers are substitutes and others are complements. We give a simple characterization of equilibrium firm memberships and organizations. We show that payoffs in our non-cooperative solution lie in the core of the corresponding cooperative game, and can be obtained in a decentralized process that reduces information and planning requirements for the entrepreneur.

Acceleration of Technology Adoption withing Firms (Research Paper)

2008-09-03T00:00:00Z

This paper studies the diffusion of multiple, related technologies among firms. The results suggest an endogenous acceleration mechanism of technology adoption: The more advanced a firm is in using a particular set of technologies, the more likely it is to adopt additional, related technologies. We show that such a mechanism can occur under fairly general circumstances. If firms are not ex ante identical, the endogenous acceleration mechanism suggests a growing divergence in technological endowment of firms in the early phases after the emergence of a new technological paradigm. The theoretical predictions are tested with a dataset that records the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries. The results show that the probability to adopt strictly increases with the number of previously adopted e-business technologies. Evidence for a growing digital divide among the companies in the sample is demonstrated for the period from 1994-2002.

I Can’t Get No Satisfaction - Necessity Entrepreneurship and Procedural Utility (Research Paper)

2008-08-20T00:00:00Z

We study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their start-up satisfaction. Our results identify a group of nascent entrepreneurs that “cannot get satisfaction” with their start-up because they did not choose to become entrepreneurs out of free will, but out of long-term unemployment or a lack of better employment alternatives. Overall, financial success is the most important determinant of start-up satisfaction. Yet, achievement of independence and creativity is also highly important, a finding that emphasizes the economic relevance of procedural utility and non-financial incentives.

I can't get no Satisfaction - Necessity Entrepreneurship and Procedural Utility (Research Paper)

2008-08-20T00:00:00Z

We study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their self-reported satisfaction regarding their start-up. Our study identifies a new facet of procedural utility and offers new insights about the motivations and goals of nascent entrepreneurs. Most importantly, we identify a group of nascent entrepreneurs that “cannot get satisfaction” with their start-up—not because their start-up fails to deliver financial returns, but because they did not choose to become entrepreneurs in the first place. This group of unsatisfied entrepreneurs includes individuals starting a business after a period of long-term unemployment and those individuals with a lack of better employment alternatives (necessity entrepreneurs). In addition, we provide additional evidence for the importance of both financial and non-financial incentives of entrepreneurs. While financial success is the most important determinant of start-up satisfaction, achievement of independence and creativity is also highly important. Our results emphasize the relevance of procedural utility for understanding economic behavior.

The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe (Research Paper)

2008-05-26T00:00:00Z

This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth. Firms that rely on Internet-enabled innovations are at least as likely to grow as firms that rely on non-Internet-enabled innovations. Finally, it was found that innovative activity is not necessarily associated with higher profitability. Possible reasons for this and implications are discussed.

Seeing the World with Different Eyes (Research Paper)

2008-04-01T00:00:00Z

Across countries, women own significantly fewer businesses than do men. We show that this is due, in large part, to the fact that the propensity to start businesses of women is significantly lower than that of men. The lower propensity of women, in turn, appears to be highly correlated to women’s lower average levels of optimism and self-confidence, and higher fear of failure. Ceteris paribus, women and men have different perceptions of the business environment and, as a result, make different decisions. We provide some evidence that this may be universally true and independent from culture, although country specific factors seem to influence perceptual differences between genders. We also show that women who are more self-confident and undeterred by failure have a greater probability to start a business than men with similar characteristics. Keywords: Nascent

Unemployment Benefits Crowd Out Nascent Entrepreneurial Activity (Research Paper)

2008-03-25T00:00:00Z

Peer Influence in Network Markets: An Empirical Investigation (Research Paper)

2007-09-14T00:00:00Z

We analyze the effect of peer influence on the diffusion of an innovative network good. We argue that the adopters of a network good have an incentive to convince others to purchase the same product because their utility depends on the number of other users. This peer-effect influences individuals’ adoption decisions alongside the more familiar installed-base-effect, based on the individual’s own insight that a larger number of installed units increases his/her benefit of adopting. We test empirically which effect dominates with Instant Messaging, an innovative network good. We arrive at surprising results with far-reaching implications for research and management. The diffusion of Instant Messaging was to a large extent driven by the peer-effect, but the installed-base-effect seemed to play no role. We perform our estimation with a discrete time hazard rate model that controls for unobserved heterogeneity.

Why Are Some Entrepreneurs More Innovative Than Others? (Research Paper)

2007-04-11T00:00:00Z

The study provides theoretical insights and empirical evidence on the emergence of different types and degrees of entrepreneurial innovativeness. The results suggest that entrepreneurial innovativeness depends both on individual factors and on the environment in which the individual lives. In particular, high educational attainment and a high degree of self-confidence are significantly associated with entrepreneurial innovativeness at the individual level. Furthermore, entrepreneurs in highly developed countries are more likely to engage in innovative rather than purely imitative activities. The results also show that product, process, and variety innovations have at least to some extent different antecedents.