Bryan Caplan  

Congenitally Entrepreneurial

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I just came across a fun paper that asks "Is the Tendency to Engage in Self-employment Genetic?" (Management Science 2008).  As usual, the answer is yes.  Based on a sample of over 3000 British twins, the authors estimate that 48% of the variance in entrepreneurship is genetic.  The rest is noise; nurture once again fails to rear its hopeful head.  Highlight:
[O]ur results offer the potential to reinvigorate a longstanding, but not universally agreed upon, aspect of entrepreneurship research: the role of individual differences in the tendency of people to become entrepreneurs. Although some entrepreneurship researchers consider individual differences to be an important explanatory factor in who becomes an entrepreneur (Shane and Venkataraman 2000), many researchers believe that individual differences are unimportant (Gartner and Carter 2003) or even a dead end (Aldrich and Wiedenmeyer 1993). As a result, in recent years, the field of entrepreneurship has tended to focus less on the role of individuals and more on the role of environmental conditions to explain the tendency of people to become entrepreneurs (Thornton and Flynn 2003). Our results indicate that individual differences matter considerably, and offer an avenue for invigorating research on the role of individual differences in entrepreneurship.
Austrian economists ought to care about this, but will they?


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COMMENTS (6 to date)
hacs writes:

Ok, it is a very interesting study. But what they have proved? In the section "Implications for research" those questions have been explained (in fact, what the study has not explained/revealed).

Without the mechanism (from the gene to the behavior, the complete mapping of chain reactions emerging at last in an entrepreneur, step by step) orderly made explicit and directly tested, those very instigative statistical regularities are not science (but they can be ideology/prejudice, can't they?).

Bob Murphy writes:

Austrian economists ought to care about this, but will they?

Why would being an Austrian economist have anything to do with it? I would be interested in this study if my genes or peer group liked it.

But they don't.

Jared Barton writes:

This is interesting, but the study highlights one of my recently acquired pet peeves with "entrepreneurship" research. One of my frustrations with much empirical entrepreneurial research is that "entrepreneur" and "self-employed" are often used interchangeably. Such substitution is an inappropriate sleight of hand, even if done with the best of intentions.

An example: two people do the same job at a firm; one of them works directly for the firm, the other sells her labor as a separate contractor. We call the second person an entrepreneur? I think not, but that's what the line of research that seeks to explain "self-employment" and then calls it "entrepreneurship" does.

Steve Sailer writes:

I don't believe nurture has nothing do with tendencies toward entrepreneurialism. That's exactly the kind of thing where having parental role models would be very important.

There are three kinds of studies:

Identical vs. fraternal twin studies

Separated identical twin studies

Adoption studies.

Merely the first kind isn't enough to establish much in the nature vs. nurture question.

Craig writes:

Is your tendency to accept crudely reductive explanations for human behaviour also genetic?

Current writes:

This could also be a mistake of correlation for causation.

It has been found in previous studies that dyslexics prefer to work for themselves. Doing so removes much of the burden of paperwork that a job would place on them.

One of the upshots of this is that far more dyslexics are self-employed. This has been known for years.

So, it may not be that entrepreneurship ability is genetic. It may be that something about the current world pushes things in that direction.

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