The Significance of Personality in Business Start-Up Intentions, Start-Up Realization and Business Success

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The Significance of Personality in Business Start-Up Intentions,

Start-Up Realization and Business Success
Article in Entrepreneurship and Regional Development · May 2007

DOI: 10.1080/08985620701218387
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ENTREPRENEURSHIP & REGIONAL DEVELOPMENT, 19, MAY (2007), 227–251
The significance of personality in business start-up

intentions, start-up realization and business success
HERMANN FRANKy, MANFRED LUEGERz and
CHRISTIAN KORUNKA§
yInstitute for Small Business Management and Entrepreneurship,
Vienna University of Economics and Business Administration;
Augasse 2-6, A-1090 Vienna, Austria, email: hermann.frank@wu-wien.ac.at
zInstitute for Sociology and Social Research, Vienna University of Economics
and Business Administration, Augasse 2-6, A-1090 Vienna, Austria
§Department of Psychology, Vienna University, Universitätsstrabe 7,
A-1010 Vienna, Austria
Numerous studies with contradictory results have been published on the relationships of
personality factors with business start-up intentions and business success. Using a comparison
of four conceptually similar studies (Vienna Entrepreneurship Studies) as a basis, this paper
analyses the varying roles of personality factors in business start-up intentions, in start-up
success and in business success. It can be shown that the significance of personality traits among
(potential) business founders decreases in the course of start-up/new business development –
from initial start-up intentions, to the start-up process and realization, and on to business success
(existence/growth). While up to 20% of the variance in the origins of entrepreneurial intentions
can be explained by personality traits, this proportion practically drops to zero in explaining
business success. The studies also enable one to assess the value of personality in relation to other
configuration fields. Overall, the data from the four studies confirms that a meaningful
assessment of the value of personality traits is only possible in conjunction with additional
influencing factors in the founder’s environment, resources and processes. The results suggest
that especially for the development of business start-up intentions it is necessary to take measures
to promote personality characteristics in schools and universities. It is not possible to predict the
long-term success of a business by evaluating the personality factors of the business founder in
early stages of the start-up process.
Keywords: personality traits; entrepreneurial intentions; start-up process; start-up realization;

success of start-ups; configuration approach.
1. Introduction
The field of new business start-ups has been the subject of increasing interest. In this
context, many different expectations have been articulated which functionally aim
for the macroeconomic goal of growth: the primary concern is to increase the potential
number of people interested in starting new businesses (start-up intentions), to
stimulate as many business start-ups as possible (start-up realization) and finally to
secure the survival and/or growth of these start-ups (business success).
The complexity of these sub-areas (intention, decision, success) and the interplay of
their processes have been the topic of many research papers aiming to generate theory.
These works have made a substantial contribution to re-orienting entrepreneurship and
start-up research, and they can be summarized in the phrase ‘from the entrepreneurial
Entrepreneurship and Regional Development ISSN 0898–5626 print/ISSN 1464–5114 online ß 2007 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/08985620701218387
228 HERMANN FRANK ET AL.
personality to the start-up process’ (Frank 1997). However, it is undisputed that a

person can make substantial contributions to the structuring of the start-up process in
his/her interactions with the environment and relevant stakeholders. In any case, the
development of start-up intentions as well as the decision to start a business requires a
person. People possess certain personality traits, and the value of these characteristics in
decisions related to the start-up processes is the focus of interest in this paper.
The genuinely psychological explanatory models employed for this purpose are
thus based on the personality traits of new business founders and attempt to answer
the questions of (1) whether the founders can generally be described with certain
personality traits, and (2) whether these characteristics can be placed in a causal
relationship with success (Rauch and Frese 2000).
First of all, it is necessary to note that the explanatory approach based on the start-
up entrepreneur’s personality traits has to be regarded critically for several reasons.
On the one hand, the question of the entrepreneurial personality is often backed by
a simple characteristics theory which does not (or does not sufficiently) take the
dynamics of the start-up process, general social circumstances and interactions
between personal and situational determinants into account, thus reducing the
complexity of start-up activities too sharply and inappropriately. On the other hand,
it is necessary to take a critical look at this approach from the perspective of
personality theory itself, in particular due to the question of stability in personality
traits as well as the technical aspects of measuring these characteristics.
Personality traits are now generally regarded as the result of interaction between
natural (‘psychogenetic’) and environmental (‘learning behaviour’) factors. The
nature versus environment/surroundings question has therefore been succeeded by the
question of stability and mutability in personality traits. In addition, an interactionist
position which explains behaviour as a result of each newly configured interaction of
personal and situational factors is generally accepted. Therefore, when discussing the
‘entrepreneurial personality’, a critical, reflexive position which takes the aforemen-
tioned objections into account is most appropriate.
However, at the same time it is necessary to note that several characteristics have
been confirmed repeatedly by empirical research in the relatively long academic
tradition of searching for an ‘entrepreneurial personality’: probably the best-known
characteristic in this context is that of a need for achievement, based on the work of
McClelland (1967). In the relevant literature, a number of researchers have shown
that start-up entrepreneurs demonstrate stronger tendencies in this area than other
professionals (Begley and Boyd 1986, Green et al. 1996) and that there are
relationships between the strength of one’s need for achievement and business success,
although such relationships are often admittedly weak (Klandt 1990, Langan-Fox and
Roth 1995). On the other hand, research has also yielded decidedly critical discussions
of this particular issue (Scott Frey 1984). In addition to the need for achievement,
another personality dimension which is examined especially often in the context of
organizational and work psychology is that of one’s locus of control. Current research
findings confirm that people with a strong internal locus of control are more adept at
dealing with the pressures of work situations, that they are more satisfied with their
activities, and that they can cope with change more effectively. A strong internal locus
of control also appears to be necessary in order to take on the risks of starting a new
business (Cromie and Johns 1983), while it is also plausible that such individuals also
show a stronger need for achievement (Brockhaus and Horwitz 1986). The third
characteristic mentioned frequently in specific reference to entrepreneurs is the
PERSONALITY FACTORS AND START-UP INTENTIONS 229
person’s risk inclination or risk propensity. Empirical findings show that entrepreneurs
can be characterized in ideal terms by a medium level of risk propensity (Stewart
1996, Göbel and Frese 1999), and that their characteristics in this respect are generally
higher than those of managers (Stewart Jr and Roth 2001).
In addition to the three personality traits mentioned above, numerous other
characteristics have also been examined. The use of broadly defined personality
questionnaires to analyse the ‘entrepreneurial personality’ (Brandstätter 1988, Moran
1998) is an approach which has to be judged critically. On the other hand, newer
approaches based on action theory are more promising (Frese 1998, 2000, 2001).
In all of the above-mentioned approaches to the ‘entrepreneurial personality’, one
can make the critical observation that the singular observation of traits is generally not
sufficient to explain decisions to pursue an entrepreneurial career or to explain success
in entrepreneurship. In addition, fundamental questions arise as to the stability of
personality traits and as to a suitable and accurate manner of implementation (Frank
1997, Rauch and Frese 2000). Likewise, the relevant literature does not supply
influential opposing positions to the question of the entrepreneurial personality.
For example, critics base their arguments on the high degree of heterogeneity among
successful business founders (Gartner 1985) or the highly mutable nature of
personality traits in the course of business development (Shaver 1995), as the
demands made of the entrepreneur in the growth phase are quite different from those
arising in the start-up process (Chell et al. 1991). In addition, it has also been observed
that the question of personality is subject to fashionable trends similar to those which
prevail in management research (Naffziger 1995, Nicholson 1998) or even personal
psychology as a whole. From a historical perspective, we have seen the field of personal
psychology undergo a phase of overestimation, followed by an opposing critical phase
and then a comeback in recent years (Rauch and Frese 2000).
This paper tests the following hypothesis by means of a comparative analysis of
four carefully designed and conceptually similar studies.
Hypothesis 1: Personality explains a higher proportion of variance in start-up intentions
compared to start-up realization and business success.
The relevant literature points to the varying status of personality traits in the start-up
process (from initial thoughts about self-employment and the decision to found a new
business right up to business success). Naffziger (1995) distinguishes three phases of
enterprise development in which personality can have varying levels of significance:
the decision to start a new business, behaviour in the start-up process, and business
success. In their outstanding overview, Rauch and Frese (2000) differentiate studies
on the emergence of entrepreneurship and on entrepreneurial success, using a
comparison of correlation values in the relevant works to support the conclusion that
personality plays a somewhat larger role in the origins of entrepreneurship than it does
in business success. One possible explanatory approach to this difference can be found
in the differentiation of ‘weak’ and ‘strong’ situations (Mischel 1968, Adler 1996).
Weak situations are characterized by a low degree of standardization, a high degree
of complexity and thus little orientation for structuring actions. In these situations,
personality factors exercise a stronger influence on the structuring of actions than in
strong situations, where personality factors carry less weight due to clear requirements
and clear general circumstances. Starting up businesses – especially preparing and
realizing the start-up – involves a large number of weak situations. Similar arguments
have been put forth by Begley and Boyd (1987) and Herron and Robinson (1993),
as well as by Utsch et al. (1999). However, no research papers to date have enabled a
direct empirical verification of this thesis beyond the comparison of professional groups
(typically managers versus entrepreneurs).
With regard to the question of personality among new business founders and
entrepreneurs, this is less a question of the explanatory value of individual dimensions
(such as the need for achievement) than one of configurations. The configuration
approach takes a comprehensive or holistic perspective which is far more suitable for
capturing and depicting the complexity of starting a new business. In management
research, the configuration approach developed out of various strategy approaches.
Highly significant examples include the work of Danny Miller, Peter Friesen and
Henry Mintzberg (Mintzberg 1979, Miller and Friesen 1984, Miller 1987), who made
substantial contributions to the development of this approach.
According to this approach, each enterprise is distinguished by its own individual
configuration, which results from the specific interplay of variables in that business
organization. One unique feature of the configuration approach is that it does not
exclude variables at first; at the start of analysis, efforts should be focused on collecting
as much information as possible and thus making it possible to generate a
comprehensive depiction of reality. This is backed by theoretical claims (cf. the
comprehensive overview of the literature in German and English language by
Hienerth 2004), especially with regard to holistic observation, fit and simplicity:
1. Holistic observation lies at the core of the configuration approach. In this context,
we assume that the parts of a social unit (such as an organization) gain their
significance from the overall unit and can not be understood in isolation from
one another (Meyer et al. 1993). At the same time, holistic analysis aims to
include many variables in order to facilitate allocation to configuration types
and to minimize allocation errors (Ketchen et al. 1997). Selecting variables and
determining the number of variables used thus play a decisive role, as these
steps impact the model’s depiction of reality (Hienerth 2004).
2. The large number of effective individual factors which are relevant to success
makes it necessary to adapt the model. A high degree of fit implies that the
organization is in an optimum state. However, this postulate of consistency
cannot be viewed as the one and only best way. ‘There is no one best set of
variables that should be used to describe all sets of configurations’ (Miller and
Friesen 1984).
3. Simplicity means that strategic and operational decisions refer to essential
influencing factors, thus reducing complexity. This is of interest in terms of
theory as well as practice.
For practical purposes, it is useful to merge the large number of variables into groups
or ‘imperatives’, thus lending (abstract) structure to the configuration analysis itself.
This is advantageous in that it enables us to generate arguments with a small number
of (internal and external) areas of influence and configuration dimensions.
For the regression-based analytical procedure chosen below, this means that all
dimensions within each individual imperative are included in the analysis (en bloc),
while the significance of the imperatives for the issue in question is accounted for using
an appropriate stepwise procedure. With regard to fit, it is important to ensure that
the significant predictors yield a picture that can be interpreted sensibly. For the sake
of simplicity, the large number of predictors is reduced to those which are statistically
significant.
The configuration approach, which was originally developed for large
organizations, was also adapted in several ways for small and medium-sized
companies (Gartner 1985, Covin and Slevin 1991, Snuif and Zwart 1994, Mugler
1998). If we summarize the basic studies cited here, the following structure of
configuration dimensions (imperatives) results: the traits of the founder/entrepreneur
(personality), resources/environment and process (as the set of management functions
planning, organization, allocation of human resources, and review/monitoring).
Thus, as compared to the work by Naffziger on the personality of the entrepreneur
(in which the varying significance of personal characteristics for different stages of
entrepreneurial activity is likewise addressed; Naffziger 1995: 32) we use a different
approach: the configuration approach also takes other imperatives into account as
theoretically equivalent. In this way, the individual remains an appropriate part
of analysis, but the focus on personality is sacrificed in the interest of a more
comprehensive view which integrates the start-up environment, resources and process.
In empirical terms, this makes it possible to analyse the significance of personality in
light of the other imperatives.
In light of the conceptual comparability of our studies, the configuration fields of
‘environment’ and ‘resources’ are presented and analysed together in this paper,
as human capital (the most essential personnel resource) is not developed until the
education stage and financial resources play a subordinate role among secondary
school students. It is also necessary to consider the fact that, especially in the pre-
organization stage of the start-up process, resources and the environment can not be
strictly separated, as the environment encompasses substantial resources such as the
entrepreneurial climate.
The mutual relationships among these dimensions shape and modify an
enterprise’s configuration over time, and the development of a (start-up) enterprise
can thus be seen as a sequence of configurations. In the field of start-up research, the
configuration approach enables a comprehensive and integrative analysis of how
business start-ups develop, and it illuminates the changes in each dimension. The
configuration approach therefore enables us to judge the value of personality traits in
the start-up process. This possibility results from the integrative perspective inherent
to the configuration approach.
2. The ‘Vienna entrepreneurship studies’
2.1 Study concept
The four ‘Vienna Entrepreneurship Studies’, which are only presented briefly in this
paper, were started in 1996 by an interdisciplinary group of researchers from the
Vienna University of Economics and Business Administration and the University of
Vienna. The studies are conceptually based on a configuration-theory approach, thus
they are well-suited for comparative empirical analysis. The four studies cover the
entire time frame of the business founder’s development, from the origins of initial
start-up intentions to the start-up process and realization right up to the success of the
new business. The fourth study is truly longitudinal and thus allows us to analyse
cause-and-effect relationships.
For each of the four studies, the sub-dimensions of the configuration dimensions
‘personality’, ‘resources/environment’ and ‘process’ were defined and implemented,
each according to the concrete questions addressed. In the configuration dimension

of ‘personality’, each study defined the three most important personality dimensions
which are relevant to business start-ups (need for achievement, locus of control,
risk propensity), and each of the three dimensions was implemented using published
scales appropriate for the ages and samples encountered. The construct of personal
entrepreneurial orientation used in the studies is personality-based and thus
categorically different from the organizational construct of ‘entrepreneurial orienta-
tion’ as developed and applied by Covin and Slevin (1991) and Wiklund and
Shepherd (2005).
2.1.1 Study 1. Personal entrepreneurial orientation and start-up inclinations: an inventory of

students at general and vocational secondary schools in Austria (Frank et al. 2001)
This study had the objective of analysing entrepreneurial orientation and start-up
intentions at relatively early stages, long before realistic start-up intentions or processes
manifest themselves. In this context, education has become a research topic of
increasing interest (Brockhaus 1993, Vesper 1993). On the basis of configuration
theory, a questionnaire was developed and presented to students at various school
types (general, technical and vocational secondary schools). In putting together the
sample, special attention was paid to covering a broad range of school types and to
the completeness of results from the classes selected. The questionnaires were used in
the 10th- and 12th-year classes (at general secondary schools) and the 13th year
(at technical and business secondary schools).
The sub-dimensions used are based on an analysis of the relevant literature as
well as expert interviews conducted during a workshop; the configuration dimensions
were defined by the research team. The following sub-dimensions of the ‘environment/
resources’ and ‘process’ configuration fields were defined and implemented for this
study.
1. Supportive upbringing: the extent of perceived support and encouragement
from the respondents’ parents during their upbringing.
2. Entrepreneurs in the environment: this covers both social reproduction (i.e. self-
employed parents) as well as role models in the microsocial environment.
3. Entrepreneurial orientation of the school: describes the school’s general orientation
with regard to self-employment and entrepreneurship.
4. Independent thought and criticism as values encouraged in instruction: describes the
fundamental orientation of school values with regard to independent thinking,
critical reflection and the creative discretion students are allowed.
5. Start-up-oriented instruction methods: this defines methods which have a direct
relationship with starting a new business (e.g. business plan simulations) and/
or can be characterized as activating (as opposed to passive/reproducing)
instruction methods.
6. Team-based instruction methods: these are educational methods based on
teamwork (e.g. projects).
7. Functions and network: describes the extent of networking with fellow students
which is relevant to self-employment.
8. Use of technology: this sub-dimension deals with the degree to which various
(new) information technologies are used.
The dependent variable for this study is the degree of start-up intentions.
The intention to start a new business consists of a general entrepreneurial orientation
and an inclination toward founding a new business – with reference to fundamental
business knowledge and start-up inclinations – which are understood to serve as a
general estimate of the probability of later self-employment. Strong start-up intentions
are among the main prerequisites for later entry into the start-up process.
2.1.2 Study 2. Entrepreneurial spirit: personal entrepreneurial orientation and start-up

inclinations among university-level students (Frank et al. 2002)
In this study, students of subjects both closely and remotely related to start-ups were
questioned with regard to the origins of entrepreneurial attitudes, likewise on the basis
of configuration theory. The sample consisted of students at Austrian universities and
specialized colleges. The students selected were close to completing their studies at the
universities or in their final year at the specialized colleges.
The configuration dimensions employed in this study were similar to those used in
the first study. In some areas, the dimensions had to be adapted in order to ensure that
the relevant fields were covered effectively for university-level students. Adaptations
were thus based on the age-specific inclusion of relevant influencing factors. For this
reason, the use of technology and supportive upbringing were removed, and the areas of
social independence (motives for the selection of location, residence abroad, etc.) and
encouraging professional contacts (the social and networking-related aspects of possible
professional activities) were defined and implemented. The process dimensions were
adapted to suit university-level educational processes. ‘Start-up intentions’ are likewise
defined as personal entrepreneurial orientation, start-up suitability and start-up
inclinations.
2.1.3 Study 3. Supporting and hindering factors in the start-up process (Frank et al. 1999a,b,
Lueger et al. 2000, Korunka et al. 2003)
The start-up process – from start-up intentions to the early stages of entrepreneurial
development – was analysed on the basis of configuration theory in this comprehensive
empirical study. The data set, which is representative of the Austrian start-up
landscape in its essential indicative values (compared to the composition of the
Austrian Chamber of Commerce, which all commercial enterprises are required to
join and which is subdivided into the fields of Trades/Services, Industry, Tourism/
Leisure, Transport and Banks/Insurance), consists of people in various stages of the
start-up process, from initial start-up ideas (contact with a relevant information
or advising centre) to the start-up stage itself and the launch of business operations
(post-start-up phase).
The questionnaire was developed on the basis of an analysis of the relevant
literature and expert interviews; the configuration dimensions were defined by the
research team.
In this study, the configuration dimensions were adapted to suit the start-up
process as follows.
1. Role models are people in the budding entrepreneur’s micro- and macrosocial
environment who create a positive image of start-ups and entrepreneurship.
2. Family restrictions: These are perceived restrictions on career activities in the
founders’ or entrepreneurs’ family surroundings.
3. A push motive for starting a new business is found in cases where the business is
started out of necessity (typical example: a start-up due to unemployment).
4. Support in the preparation phase: This dimension describes the perceived support
from various new businesses advising institutions or facilities.
5. Significance of networks: Estimates of the presence and value of networks which
could be of significance for the start-up (customer acquisition through the
private sphere, activities in associations, etc.).
6. Financial situation: Financial resources (income situation, collateral, etc.)
7. Human capital consists of education and professional experience relevant to
starting a new business, relevant experience in the respective industry and
role-related experience as well as knowledge of the law relevant to starting new
businesses.
8. Organizational effort in the start-up process refers to the respondents’ estimates of
the effort required in various areas relevant to the start-up (location searches,
business plan creation, etc.).
9. The use of information consists of estimates of the value of start-up-related
information resources (e.g. access to grants).
10. Failure considerations describe critical considerations in the course of the start-up
process.
11. Start-up difficulties refer to the respondents’ assessment of problems in the general
conditions for starting a new business (e.g. access to external funds).
The dependent variable start-up probability covers estimates of the probability of
launching actual business operations among founders who are still in the start-up
process (but have not yet launched business operations).
2.1.4 Study 4. From business ideas to business success: an empirical analysis of development in
Austrian business start-ups (Frank et al. 2002)
This study analyses the realization of start-up decisions and business success after
a period of just over 3 years, as a follow-up investigation for Study 3. Of the 1169
respondents in Study 3, 932 subjects gave their addresses. These respondents were
contacted in the follow-up phase and 757 of them responded. The number of cases
which were included in our data analysis is only marginally lower (746); the difference
can be attributed to incomplete questionnaires. Owing to the study’s longitudinal
design, it was possible to make causal statements on the relative value of personal
characteristics and personality traits in start-up realization and business success using
a comprehensive, configuration theory-based approach.
The configuration dimensions from Study 3 were also used in this study. In the
case of new business founders, the dependent variable was start-up success, which is
defined as the realization of start-up plans (launch of business operations) in the
previous 3 years. In the case of entrepreneurs, defined here as the group of people who
launched new businesses approximately 3 years earlier, the dependent variable was
the continued existence of the business after 3 years (a weak success criterion). In this
context, another dependent variable – which is broadly acknowledged in the relevant
literature (Frank and Korunka 1996, Moser and Schuler 1999) – is growth in the
number of employees over the observation period (a strong success criterion).
Figure 1 shows the time frame covered by the four studies with regard to
entrepreneurial spirit as well as their relationships to the central hypothesis of this
study.
Potential number of
‘Entrepreneurial Persons’ ‘Potential number of
start-ups’
Inte
Main rnal
and
hypo Exte
thes rnal
es: D Sele
ecre ctio
ase n Pr
of im oce
’ port
rit ance sse
f
to S pi of ‘P
s
en rial erso
nalit
pm u y’
lo ne
eve epre
D ntr
‘E
Time/age
15 20
Study 1: Study 2: Study 3: Study 4:

Schools Students Start-up process Start-up success
Figure 1. The four studies in relation to the development of Entrepreneurial Spirit

and the main hypothesis.
2.2 Instruments
In Studies 1 to 3, a questionnaire was developed in several steps for each study: on the
basis of comprehensive research in the relevant literature and expert interviews, the
dimensions to be covered by the configuration fields of ‘personality,’ ‘environment/
resources’ and ‘process’ were defined. In the field of personality, previously published
scales with satisfactory statistical values were used (table 1). In the individual
dimensions of the ‘environment’ and ‘resources’ field as well as the ‘process’ field,
scales and indices were developed and then tested and modified in preliminary studies.
For statistical evaluations, tested scales and indices were available which (at least) did
not show strong deviations from normal distributions and which yielded satisfactory
statistical values. For a more detailed description of the development of these
instruments, please refer to the published studies themselves. The predictors used in
Study 4 were the corresponding dimensions from the questionnaire in Study 3.
Table 1 summarizes the most important indicative values in the scales and indices
used in this comparative analysis. All of the dimensions have been transformed to a
uniform scale of 0 to 100.
3. Findings
In accordance with the objective of this paper, only those analysis steps in each study
which were required for comparison purposes and for the assessment of the hypothesis
are described. For this purpose, regression analyses were calculated separately for each
of the four studies. The dependent variables were the dimensions relevant to each
study (start-up intentions, start-up probability, start-up success, business success).
236
Table 1. Variables in regression analyses, indicative statistical values1.

Predictors for the ‘person- Predictors for the ‘environ-
ality’ configuration field ment/resources’ configuration Predictors for the ‘process’
Dependent variable (Source/ (Source/n items, field (Source/n items, configuration field (Source/n
Study n items, consistency) consistency) consistency) items, consistency) n
(1) Start-up Integrated: Personal Need for achievement Entrepreneurs in the Entrepreneurial orienta- Phase 2 only
intentions Entrepreneurial (F-DUP Teens) surroundings tion of the school (n ¼ 417)
among orientation Internal locus of (5, Index) (7, ¼ 0.74)
18-year-olds (Enterprise, AIST), control(F-DUP Use of technology Instruction:
Start-up inclination Teens) (7, ¼ 0.74) Independence/critical
(2, Index), Start-up Innovative orientation* Supportive upbringing thought (7, ¼ 0.74)
suitability (F-DUP Teens) (6, ¼ 0.78) Methods: Startups
(8, ¼ 0.80) Active functions/network (8, ¼ 0.76)
(20 Items, ¼ 0.83, NV) (14, Index) Methods: Teamwork
(4, ¼ 0.71)
(2) Start-up Integrated: Personal Need for achievement Entrepreneurs in the Entrepreneurial orienta- n ¼ 777
intentions Entrepreneurial (F-DUP) surroundings tion of education
among orientation Internal locus of control (5, Index) (4, ¼ 0.75)
university- (Enterprise, AIST), (F-DUP) Encouraging prof. con- Instruction:
level students Startup inclination Risk propensity tacts (4, Index) Independence/critical
(2, Index), Start-up (F-DUP) Social independence thought (7, ¼ 0.73)
suitability (6, Index) Methods: Start-ups
(5, ¼ 0.68) Active functions/network (4, ¼ 0.70)
(17 Items, ¼ 0.78, NV) (8, Index) Methods: Teamwork
(7, ¼ 0.66)
HERMANN FRANK ET AL.
(3) Start-up Start-up probability Need for achievement Role models (5, Index), Organizational effort n ¼ 314
probability (2, Index) (Modick 1977) Family restrictions (14, Index)
among (Interval scale, right- Internal locus of control (6, Index), Push Use of information
founders shifted distribution) (Krampen 1991) motive (2, Index), (17, Index)
Risk propensity (Frese Support in the pre- Failure considerations
1998) paration phase (individual item)
(21, Index), Start-up difficulties
Network significance (12, Index)
(11, Index)
Financial situation
(2, Index), Human
capital (23, Index)
(4a) Start-up Founded: yes/no (nom- As in 3 As in 3 As in 3 n ¼ 290

success inal scale) 159 ¼ yes
(4b) Business Existence: yes/no (nom- As in 3 As in 3 As in 3 n ¼ 456
success – inal scale) 396 ¼ yes
existence
(4c) Business Staff growth (nominal As in 3 As in 3 As in 3 n ¼ 456
success – scale) 80 ¼ yes
growth
PERSONALITY FACTORS AND START-UP INTENTIONS
1
Sources: (AIST (Bergmann and Eder 1999); F-DUP (Fragebogen-Diagnostik zur Erfassung unternehmerischer Potentiale ¼ Instrument for Evaluation of entrepreneurial
potentials, Müller 2001); F-DUP Teens (Würth and Klein 2001); Index . . .. Total score by content criteria).
*Because F-DUP Teens does not include risk propensity, the ‘Innovative Orientation’ Scale – which is not too dissimilar in concept – was used here.
237
In a step-by-step procedure, the predictor groups ‘personality’, ‘environment/

resources’ and ‘process’ (in that sequence) were included en bloc in the analyses.
Before the analyses were performed, the linear model was checked for potential
violations.
3.1 Study 1. Start-up intentions among secondary school students
The sample consisted of 875 students from 14 schools located throughout Austria
(6 general secondary schools, 4 commercial academies, 4 technical and vocational
secondary schools). The survey was carried out during classes in the presence of an
instructor and a member of the research team. Participation in the survey was
voluntary, and no pupils at all refused to fill out the questionnaire. At each of the
schools, students in the 9th/10th and 12th/13th year were questioned.
The questionnaires were filled out during class, and participation was anonymous.
The schools themselves were selected with a view to maximizing distribution
(especially with regard to start-up orientation, e.g. commercial academies are
expected to generate a higher start-up orientation of their students than general
secondary schools).
In the ensuing analyses, only students in their final year were selected, as it could
be assumed that they had already begun thinking about their future careers. Of the
426 students in these graduating classes, we were able to include 417 fully completed
questionnaires in our analysis. The sample is almost equally distributed in terms of
gender (percentage of women: 49.3%).
Only a small group (5%) of students – with relatively large differences among the
schools and school types – indicated that they were very likely to be self-employed.
The three F-DUP Teens scales yielded the following values (maximum: 100): Need for
achievement: x ¼ 35.1, SD ¼ 22.9; Internal locus of control: x ¼ 55.4, SD ¼ 21.8;
Innovative orientation: x ¼ 55.1, SD ¼ 14.9. Table 2 summarizes the main results
Table 2. Main results of regression analysis; Study 1.
Multiples R2 Significance Significant individual

Analysis step (block) (Increase, total) (in relation to R2 change) predictors (beta) (p < 0.05)
(1) Personality 0.197 0.000 Need for achievement (0.14)

Innovative orientation (0.38)
(2) Environment/ 0.140 (0.338) 0.000 Need for achievement (0.09)
resources Innovative orientation (0.29)
Entrepreneurs in the surroundings (0.13)
Use of technology (0.22)
Active functions/network (0.21)
(3) Process 0.054 (0.391) 0.000 Need for achievement (0.09)
Innovative orientation (0.28)
Use of technology (0.20)
Entrepreneurial orientation of school (0.18)
Dependent variable: Start-up intentions (Entrepreneurial orientation, Start-up inclination, Start-up

suitability); x ¼ 54.3, SD ¼ 17.0; Normal distribution.
n ¼ 417; Durbin–Watson ¼ 1.71.
of our step-by-step regression analysis (dependent variable: start-up intentions;
predictors: personality, environment/resources and process dimensions).
One essential component in the variance of the dependent variable (R2 ¼ 0.20)
is explained by personality dimensions (need for achievement and innovative
orientation). The environment and resources dimensions make a somewhat smaller
contribution to variance, with the strong use of technology, role models
(entrepreneurs in the respondents’ surroundings) and an actively used network
appearing to play an especially significant role. In the ‘process’ configuration field,
only the (perceived) entrepreneurial orientation of the school played a significant
role in start-up intentions
3.2 Study 2. Start-up intentions among university-level students
In this study, the sample consisted of 837 students at universities (at least in their
third year) and specialized colleges (at least in their fourth semester). The survey
was carried out during university classes, and the rate of return was almost 100%
among the students present. Incomplete questionnaires were excluded from the
data analysis. Due attention was paid to a broad distribution of students’ majors
(psychology, sociology, computer science, business administration, forestry,
technical/natural-science and technical/economic majors) and locations (9 uni-
versities and 6 specialized colleges). The questionnaires were presented in seminars
at universities and during classes at specialized colleges. Participation was
voluntary and anonymous. The respondents were predominantly between the
ages of 21 and 30 years old (universities: x ¼ 25.2; specialized colleges: x ¼ 24.0);
the proportion of female students was 41.3%, with the individual subjects showing
gender distributions as anticipated. We were able to use a total of 832 fully
completed questionnaires in our statistical analyses.
The students’ estimates of the probability that they would be self-employed in their
later careers were between 30% and 35% in the technical majors, depending on the
type of education and location, while this figure was between 45% and 60% among
business and economics majors and significantly lower in the social sciences. The three
F-DUP scales yielded the following values (maximum: 100): Need for achievement:
x ¼ 64.7, SD ¼ 23.1; Internal locus of control: x ¼ 51.4, SD ¼ 23.5; Risk propensity:
x ¼ 63.8, SD ¼ 21.7. Table 3 gives an overview of the main results of our step-by-step
regression analysis (dependent variable: start-up intentions; predictors: personality,
environment/resources and process dimensions).
In comparison to Study 1, the explanatory value of personality dimensions for
start-up intentions is somewhat lower, and all three individual dimensions make a
significant contribution. Likewise, the explanatory value of the ‘environment/
resources’ dimensions also diminished slightly in this study, with role models
(entrepreneurs in the subjects’ surroundings) and the social network as well as the
extent of experienced independence again making a significant contribution. In this
study, the education process was again only responsible for a relatively slight portion
of variance; the perceived entrepreneurial orientation of the educational institution
and the extent of team-based instruction methods also made a significant contribution
(analogous to the previous study).

(1) Personality 0.131 0.000 Need for achievement (0.21)

Internal locus of control (0.12)
Risk propensity (0.20)
(2) Environment/ 0.115 (0.247) 0.000 Need for achievement (0.18)
resources Internal locus of control (0.12)
Social independence (0.15)
(3) Process 0.057 (0.303) 0.000 Need for achievement (0.20)
Internal locus of control (0.10)
Social independence (0.14)
Innovative orientation of education (0.20)
Team-based instruction methods (0.12)
Dependent variable: Integrated dependent variable (Entrepreneurial orientation, Start-up inclination,

Start-up suitability); x ¼ 52.1, SD ¼ 15.5; Normal distribution.
3.3 Study 3. Start-up probability of potential business founders
The sample in this study consisted of 1169 people at various stages of the start-up
process, from the first concrete start-up activities (founders) to the post-start-up phase
(entrepreneurs). These stages incorporate various possibilities and restrictions with
regard to continuing or aborting the start-up process, similar to Ronstadt’s ‘corridor
principle’ (Ronstadt 1988).
A total of 5983 respondents were contacted through start-up assistance
organizations (advice centres), financial support institutions and at relevant events
(business start-up fairs). Questionnaires were filled out in person or returned by mail.
Participation in the study was voluntary and anonymous; however, due to the
intended longitudinal design of the study (Study 4), the respondents were asked to
give their names and addresses on a voluntary basis (approximately 80% did so;
see Study 4).
In the ensuing evaluations, only those 341 people were included who were in a
phase of the start-up process (founders: from initial start-up activities to shortly before
the launch of business operations). The statistical evaluations are based on 314
complete data sets. The range of planned start ups covers a wide variety of business
enterprises, trades/crafts and commercial businesses. The majority of businesses were
new start-ups (90%). The age of the business founders was between 18 and 61 years
(x ¼ 34.9, SD ¼ 8.0), the percentage of women totalled 30%. In its essential indicative
values (industry distribution, start-up size, age of founder, gender of founder,
education), the sample can be considered representative of the Austrian start-up
landscape (Frank et al. 1999a,b).
The three personality dimensions yielded the following results: Need for
achievement (maximum: 100): x ¼ 79.4, SD ¼ 9.3; Internal locus of control:
x ¼ 81.2, SD ¼ 9.4; Risk propensity: x ¼ 55.1, SD ¼ 12.2. Table 4 summarizes the

(1) Personality 0.056 0.000 Risk propensity (0.19)

(2) Environment/ 0.054 (0.110) 0.012 Risk propensity (0.18)
resources Support in the preparation phase (0.17)
(3) Process 0.052 (0.162) 0.001 Risk propensity (0.17)
Use of information (0.16)
Failure considerations (0.15)
Dependent variable: Start-up probability; x ¼ 77.8, SD ¼ 24.0; right-shifted distribution.

results of our step-by-step regression analysis (dependent variable: start-up

probability, the subjective probability of launching the planned business in the near
future).
Only a small portion of variance in start-up probability (5.6%) can be attributed
to personality dimensions, and only risk propensity reached statistical significance as
an individual predictor. Likewise, the configuration dimensions of the environment/
resources field have only little explanatory value; the ‘support in the preparation
phase’ dimension was the only one to reach statistical significance. The contribution
of the ‘process’ configuration dimension was similar in size to Studies 1 and 2, the
significant individual dimensions being failure considerations and the use of
information. Therefore, those founders in the start-up process who have a higher
propensity for risk and a lower inclination to think about failure, and who feel
that they receive adequate support in the preparation phase and use available
information as much as possible showed a higher subjective probability of realizing
their start-up plans.
3.4 Study 4. Longitudinal start-up success and business success
Some 80% of the 1169 respondents to Study 3 gave their names and addresses
voluntarily. A high percentage of these respondents were interested in a summary of
the results of the study. Those not giving their names and addresses may have not been
interested in the results or in a future study of the research team. After 3 years, we were
able to contact just over 80% of those respondents by telephone in order to question
them about start-up realization and business success. Those respondents who could
not be contacted may have changed their location or their names (marriage), etc.
The analyses of Study 4 are based on a data set of 754 cases, which likewise
demonstrated a representative distribution in its indicative values.
In the first step, the predictors of start-up success were analysed. For this purpose,
we used the sub-sample of respondents who were in the start-up process or who had
at least started and then temporarily interrupted the start-up process in the previous
study (Study 3). The data set thus covered a total of 290 respondents, 159 of whom
had launched their businesses (however, 15 of those 159 had failed in the meantime).
That means that approximately 55% of the start-up phase respondents in Study 3’s
representative sample had launched business operations after 3 years. If a realistic
estimate of start-up success among those respondents who could not be reached – and
the fact that 15 of them had failed in the meantime – is taken into account, this yields
an estimated percentage of 40% after 3 years. With regard to the distribution of age
and gender, the sub-sample was similar to the sample in Study 3 in its essential
indicative values.
In the three personality dimensions, the sub-sample yielded the following values
for the respondents who demonstrated start-up success (¼Start-up realized): need for
achievement (maximum: 100): x ¼ 80.1, SD ¼ 9.5; Internal locus of control: x ¼ 80.5,
SD ¼ 9.8; Risk propensity: x ¼ 54.9, SD ¼ 10.9.
Table 5 summarizes the results of our regression analysis for start-up success.
The dependent variable here was a nominal variable (start-up realization: yes/no),
and the configuration dimensions from Study 3 were used as predictors.
The variance in the dependent variable which can be explained by means of the
configuration dimensions decreased substantially. This was to be expected because this
study differed from the previous studies in that it was longitudinal, while the others
were cross-section analyses and used an objective dependent variable (start-up
realization: yes/no). As this longitudinal study only measured the nominal change and
not the dimensions themselves, the reduction in explained variance is to be expected.
In the ‘personality’ configuration field, risk propensity remained a significant
predictor, and the field of ‘environment/resources’ did not show a higher explanatory
contribution. This implies that willingness to take risks plays a significant role in start-
up realization. However, this risk propensity may have to be differentiated from the
risk propensity of entrepreneurs who have already completed their start-up processes.
The contribution of the ‘process’ field was approximately equal to that of Study 3.
Therefore, it can be noted that start-up success (start-up realization) becomes
somewhat more probable along with a higher propensity for risk and comprehensive
preparations in the start-up phase (increased organizational effort and use of
information). The higher risk propensity might also be attributed to learning effects
which most probably arise in the course of the start-up process and which increase the
ability and willingness of the founder to handle risky situations. Owing to the
longitudinal design of the study, we can assume a causal relationship in this context.
In the next step, the predictors of business success were analysed. First, the
existence of the business after 3 years was analysed as a ‘soft’ criterion for success
(survival rate). The sample consisted of 456 respondents who were already ‘new
entrepreneurs’ at the time of Study 3 and could be contacted and questioned in
Study 4. Of those 456 respondents, 60 (13.2%) had failed in the meantime.
Table 5. Main results of regression analysis; Study 4 – Dependent variable

Start-up success.


(2) Environment/resources 0.013 (0.051) 0.792 Risk propensity (0.16)
Organizational effort (0.15)
Use of information (0.17)
Dependent variable: Start-up success (start-up realized after 3 years: yes/no).

n ¼ 290 founders at time t1 (t2: no: 131/yes: 159); Durbin–Watson ¼ 2.04.
The survival rate after at least 3 years is thus 86.8%. When a realistic estimate of the
survival rate among respondents who could not be reached in this study is taken into
account, this figure is reduced to 71% (this number is based on the consideration that
the group of new entrepreneurs who could not be reached shows relatively high
similarity in configuration analysis to the group of failed entrepreneurs. Based on the
assumption that approximately 80% of the new entrepreneurs who could not be
reached had already failed and that the other portion can be attributed to location
changes, name changes, etc., the resulting survival rate is approximately 71%). This
value corresponds to more recent (and comparable) studies in German-speaking
countries (Frank and Wanzenböck 1994, Brüderl et al. 1996, Wanzenböck 1996). A
comparatively lower survival rate was found in commercial businesses, and there were
no significant age or gender effects.
In the three personality dimensions, the following values resulted for the sub-
sample of respondents who demonstrated business success (existence of the business
after at least 3 years; maximum: 100): Need for achievement: x ¼ 80.9, SD ¼ 10.1;
Internal locus of control: x ¼ 80.6, SD ¼ 9.1; Risk propensity: x ¼ 56.2, SD ¼ 11.6.
Table 6 gives an overview of our regression analysis for business success. The
dependent variable here was likewise a nominal variable (existence of the business:
yes/no), with the configuration dimensions from Study 3 serving as predictors.
Again, the configuration dimensions’ contribution to explained variance in the
dependent variable has decreased markedly. In the ‘personality’ configuration field,
risk propensity remained a significant predictor, this time as a negative value.
The ‘environment/resources’ configuration field allows an explanation of approxi-
mately 5% of variance in the dependent variable, with resources contributing
significantly to the explanation. The process dimension does not make a significant
contribution to explaining business success.
The survival of a company can thus only be predicted to a minimal extent by the
configuration dimensions used. In this context, the significant individual predictors
can also be viewed as causal due to the longitudinal design of the study. The survival
of the company becomes somewhat more probable when risk propensity is slightly
lower, a solid financial basis is provided and the availability of support is perceived
in the preparation phase. Only the negative value for the ‘human capital’ dimension is
Table 6. Main results of regression analysis; Study 4 – Dependent variable:

Business success (Existence).

(2) Environment/ 0.054 (0.078) 0.001 Risk propensity (0.12)
resources Human capital (0.12)
Financial situation (0.12)
Support in the preparation phase (0.10)
Human capital (0.12)
Financial situation (0.10)
Dependent variable: Business success (Existence after 3 years: yes/no).

n ¼ 456 Entrepreneurs at time t1 (t 2: no: 60/yes: 396); Durbin–Watson ¼ 2.04.
Table 7. Main results of regression analysis; Study 4: Dependent variable –

business success (strong growth).
(1) Personality 0.005 0.498 –

(2) Environment/resources 0.051 (0.056) 0.001 Push factor (0.13)
Network significance (0.12)
(3) Process 0.022 (0.078) 0.035 Push factor (0.13)
Network significance (0.11)
Organizational effort (0.15)
Dependent variable: Business success (Existence after 3 years and staff growth (doubled or by more than
5 employees): yes/no).
n ¼ 456 Entrepreneurs at time t1 (t 2: no: 376/ yes: 80); Durbin–Watson ¼ 2.08.
unexpected in this context: a detailed analysis showed that the survival rate among
respondents with academic degrees was responsible for this value (Frank et al. 2002).
In the final step, a ‘strong’ success criterion – growth in the number of employees –
was used to analyse business success. In this context, businesses were defined as
successful – in light of their effects on employment in society – if their staff had grown
by more than 5 employees (or more than doubled) in the previous 3 years. Some 80 of
the 456 businesses fulfilled this success criterion. The portion of businesses significantly
decreased for this criterion. A significant gender effect was also observed, although
young female entrepreneurs (under 30 years) were represented in the sub-sample of
the 80 very successful companies with a significantly higher frequency.
In the three personality dimensions, the following values resulted for the sub-
sample of 80 respondents who had demonstrated business success (in the form of
substantial growth). Need for achievement (maximum: 100): x ¼ 82.0, SD ¼ 9.7;
Internal locus of control: x ¼ 81.8, SD ¼ 9.0; Risk propensity: x ¼ 56.9, SD ¼ 13.2.
Table 7 summarizes the results of our regression analysis of business success
(defined as substantial growth). Again, the dependent variable is a nominal variable
(growth in the number of employees: yes/no), and the configuration dimensions from
Study 3 were used as predictors.
The overall proportion of explained variance in the dependent variable was again
reduced, and personality dimensions did not make a significant contribution. The
‘environment/resources’ configuration fields again explained approximately 5% of
variance, with an additional 2% contributed by the ‘process’ dimension. Therefore,
those entrepreneurs who founded their businesses less out of necessity (push factors)
than others, who had built a solid network around them and who themselves realized
the start-up process carefully showed a slightly higher probability of substantial success.
3.5 Comparison of the four studies
In our comparison of the four studies presented, we assumed a certain degree of

comparability. This is ensured by the use of identical configuration fields (personality,
environment/resources, process) and the identical use of dimensions in the individual
configuration fields. Start-up intentions as well as start-up success can be used as a
reference group, as these groups represent the starting and end points of the
development sequence analysed.
Explained variance Personality
for the target value Environment/resources/process
Study 1 Study 2 Study 3 Study 4

20
15
10
0
Intentions Start-up probability Existence
Intentions Start-up success Growth
Figure 2. Proportion of explained variance from start-up intentions to

business growth.
A comparison of the results of the analogous regression analyses in the four studies
enables an estimate of the personality traits’ explanatory value in all stages of the
process analysed, from start-up intentions to business success (figure 2).
In this context, the substantial decrease in the explanatory value of the three
personality dimensions can be seen quite clearly over the entire course of start-up/new
business development from initial start-up intentions to business success. The
explanatory value of the ‘environment/resources’ and ‘process’ fields likewise decreases
markedly, at least in the initial stages leading up to start-up realization. These fields
then show an increase in explanatory value for business success. In relation to the
explanatory value of personality, the configuration fields of ‘environment/resources’
and ‘process’ increase markedly over the course of start-up/new business development.
4. Discussion
4.1 Main findings
In this paper, we have been able to use a comparison of four conceptually similar
studies on new business start-ups to show that the significance of personality traits
among (potential) business founders decreases in the course of start-up/new business
development – from initial start-up intentions, to the start-up process and realization,
and on to business success (existence/growth). While up to 20% of the variance in the
origins of entrepreneurial intentions can be explained by personality traits, this
proportion practically drops to zero in explaining business success. The studies, which
were based on configuration approach, also enable us to assess the value of personality
in relation to other configuration fields.
4.2 Methodological considerations
Let us first turn to a number of methodological considerations: in effect, the

comparison of the four studies constitutes a cross-sectional study, thus one cannot
claim causality (in the narrow sense) in these findings. However, a high level of
meaningfulness is ensured by the fact that the four studies at least generally fulfill the
requirements of representative samples: in the two studies at educational institutions,
due attention was paid to maintaining a high degree of heterogeneity among the
institutions, and within the institutions the questionnaires were filled out by all
students in a particular class or all students in a particular degree course or university
class. This means that the results are representative with regard to educational
institutions, whereas a bias in relation to the structure of the Austrian start-up
landscape can be assumed especially in Study 2, as (for example) university students
will generally not start-up businesses in skilled trades.
The composition of the sample in Studies 3 and 4 corresponds to that of the
Austrian start-up landscape – defined as the structure of realized start-ups in terms
of industries and sections in the Austrian Chamber of Commerce classification – in its
essential indicative figures, while start-up behaviour does not correspond to the
current structure of existing companies. For example, high growth rates were recorded
in information technology and consulting (Frank et al. 1999a).
The respondents’ assessments of the ‘environment/resources’ and ‘process’
configuration fields were surveyed in a manner analogous to that used for the
personality dimensions. The dependent variables in Studies 1 to 3 were also based on
respondents’ estimates. Therefore, it is not entirely possible to rule out overestimates
of these dimensions due to a common artificial variance (response styles, etc.), but the
effects of such an error were kept to a minimum by wording the questions as
objectively as possible in the ‘environment/resources’ and ‘process’ fields as well as the
dependent variables. Study 4’s dependent variables are objective facts analysed after
a period of 3 years. In this case, we can rather assume that the ‘true’ relationships
were underestimated (Frese 1985). However, in light of the degree to which these
relationships changed over the period (figure 1), we can assume that the fundamental
development – a decrease in the importance of personality over time – remains valid
even when the aforementioned distortions are taken into account. Verification of this
paper’s main thesis by means of a truly longitudinal study would be unrealistic due to
the long observation periods it would require.
Recently it has been acknowledged with increasing clarity that the roots of an
entrepreneurial career can be attributed to early phases of a person’s socialization
(Schmitt-Rodermund and Silbereisen 1999). The two studies carried out at
educational institutions are thus particularly topical in start-up research, although
the comparison of school pupils and university students with entrepreneurs might be
subject to certain limitations due to the different worlds in which they operate
(Robinson et al. 1991). On the basis of the corresponding findings of those two studies,
start-up intentions appear to be generated by multiple causes and influenced by
personality aspects as well as role models and networking experience. It is thus possible
to access entrepreneurial potential through educational institutions. The data
confirms that the entrepreneurial orientation of the educational institution likewise
has a favourable effect on the development of start-up intentions, although the extent
of this effect is markedly lower than those of personality, environment and resources.
An improvement in the positive effects of the educational environment on the
development of start-up intentions would be possible by means of the role models
conveyed in education as well as activating instruction methods that promote
networking, for example. These possibilities are conceivable in both secondary schools
and universities/specialized colleges.
Initial start-up intentions do not constitute a decision to begin the start-up process.
In effect, such intentions are attitudes closely related to personality. If we postulate
at least a certain degree of mutability in the personality dimensions examined in this
paper, the role of education would primarily be one of encouraging and developing
such personal traits.
Study 3 investigates the predictors of start-up probability among people who are
already in the process of starting a new business, which lasts at least several months
(usually even longer). Personality traits only seem to have a slight influence on this
process; an increased propensity for risk, however, seems to accelerate the process.
The relative values of the environment, resources and process configuration fields gain
significance in this context. In particular, those dimensions which point to sound
preparation of the start-up appear to increase the probability of start-up realization.
A comparison of the absolute manifestations of these personality dimensions across
the studies is only possible to a certain extent, as it was necessary to adapt their
implementation in the questionnaires due to the differing target groups, which could
reduce comparability to a certain extent. However, the markedly higher values –
especially in the need for achievement and internal locus of control – in connection
with a markedly lower distribution in Studies 3 and 4 suggests that highly effective
self-selection and external selection processes influence the actual entry into the start-
up process. The implementation of a business idea in a start-up process seems to be
favoured by a specific personality disposition associated with stronger characteristics in
the dimensions relevant to starting a new business (self-selection). At the same time,
strong external selection processes through the various stakeholders in the start-up
process (advising, financing, incentives, etc.) can also be observed in this context: at
the very least, implicit personality assessments play a substantial role in the decisions
made by these stakeholders.
The results of Study 4 are the most meaningful because it involved truly
longitudinal observation over 3 years, a period of time which is considered to be
extremely relevant in start-up processes. This is because the phenomenon of the
liability of newness or liability of adolescence roughly covers this period, in which the
risk of failure is highest, thus the period attracts greater research interest (Brüderl and
Schüßler 1990) and because its dependent variables could be defined in objective
terms. In this way, it is not surprising that the explained variance in the dependent
variables again decreased markedly in this study. At the same time, a pattern can be
recognized: in effect, the meaning of personality traits can practically not be verified
for the true success criteria in new businesses (growth), while the ‘environment/
resources’ and ‘process’ configuration fields gain in significance for business success
in relation to personality (although their contribution to explaining variance also
decreases).
The existence of a company after at least 3 years is a widely acknowledged success
criterion (Moser and Schuler 1999). Our findings show that it is hardly possible to
predict the survival of a new business on the basis of entrepreneur estimates in the
earliest stages of the business. For risk propensity, a comparison of the two sub-studies
yields a differentiated picture: a comparatively higher risk propensity is advantageous
in the realization of start-up decisions, while the opposite can be observed for the
continued existence of the business. This agrees with generally accepted indications
that entrepreneurs ideally have a medium propensity for risk (Rauch and Frese 2000).
The risk appetite which is required to make the ‘jump’ into self-employment can thus
even prove harmful in later stages. Additional indications of a business’s chances of
survival can mainly be derived from the entrepreneur’s resource situation.
The personality traits of an entrepreneur have no significant bearing on
economically relevant business success, which is defined as substantial growth in the
number of employees in a business; this does not agree with McClelland’s findings but
is basically confirmed by more recent meta-analyses which investigate this idea and
only find very weak connections (Rauch and Frese 2000). On the basis of the data
available, fast-growing businesses would appear to be those which are not founded out
of necessity (i.e. not due to a push factor), rather those which are distinguished by
careful organization in the start-up process and in which the founder succeeds in
creating and maintaining sound networks ( Johannisson 1988).
4.3 Conclusions
Overall, the data from the four studies confirms that a meaningful assessment of the
value of personality traits is only possible in conjunction with additional influencing
factors in the founder’s environment, resources and processes (Gartner 1985). From
the standpoint of action theory, actions can be regarded as mediators between
personality traits and the objectives intended or achieved. In an interactionist
interpretation, actions can be predicted completely when both personality and
situational influences are completely known (Funder 2001). The ability to predict
business success is thus contradicted above all by the strong situational dynamics of the
overall development process, from the beginning of the start-up process to the initial
stage of business development, the latter being subject to the additional influences of
customer and competitor behaviour.
Therefore, the early diagnosis of a start-up’s potential success by means of
personality assessment – which is desired by many stakeholders in the process – is
untenable on the basis of these findings. Such diagnoses should be replaced by (timely)
measures in the field of secondary education which encourage the development of
autonomous and self-determined personalities and thus encourage students to pursue
their career ideas more actively. In the future, personality-oriented start-up research
should place more emphasis on the early development of entrepreneurial personalities
in order to identify the determinants of emerging entrepreneurial personalities more
precisely and thus to derive specific and substantiated measures for educational
offerings in secondary schools and universities.
Overall, these findings indicate that new businesses tend to emancipate themselves
from their initiators – and that the initiators lose significance (the founder occupies less
of the total psychological space of the organization (Katz and Kahn 1978) – in the
course of the start-up process and in the early business development stage. However,
this also implies that it is indeed possible to influence the potential number of people
willing to start new businesses on the basis of classic personality traits (among
founders). In practice, this means that educational offerings have to be designed in such
a way that in addition to conveying knowledge of the start-up process they especially
encourage the personality traits analysed in this paper, as these traits can be regarded
as essential factors influencing the development and realization of start-up ideas.
In this context, we can assume a positive connection with activating and action-
oriented instruction methods. Other relevant characteristics which enable educational
institutions to exercise influence on this process include the entrepreneurial orientation
of the school, college or university and the conveyance of role models. Both influencing
factors can be brought to bear by means of synergetic co-operation with successful
owner-run businesses. In this way, the environment and process dimensions can also
play a stronger role. This idea is worth noting because it is more difficult to simulate
relevant and real start-up environments and processes in educational institutions,
which, depending on perceptions, could lead to personality traits gaining a higher
status. For those who have actually begun the start-up process or are running a new
business, perceived environmental factors then gain considerable significance and
consequently explanatory value. However, this consideration does not in any way
contradict the conclusion that in order to increase the potential number of people
willing to start new businesses it is necessary to encourage the personality traits relevant
to new business start-ups in the education process. The stronger these personality
dimensions become, the less likely it is that external and self-selective mechanisms will
take effect and – according to these findings – reduce this potential considerably. In this
context, it is also necessary to take into account that the additional effect derived from
conveying knowledge of the start-up process (which makes candidates more suitable for
starting a new business in addition to the start-up idea) was not discussed in this paper.
This could give rise to an additional increase in the value of personality traits in this
context.
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The Signiﬁcance of Personality in Business Start-Up Intentions,

Article in Entrepreneurship and Regional Development · May 2007

Frank Hermann Manfred Lueger

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The signiﬁcance of personality in business start-up

Keywords: personality traits; entrepreneurial intentions; start-up process; start-up realization;

personality to the start-up process’ (Frank 1997). However, it is undisputed that a

2. The ‘Vienna entrepreneurship studies’

2.1 Study concept

each according to the concrete questions addressed. In the conﬁguration dimension

2.1.1 Study 1. Personal entrepreneurial orientation and start-up inclinations: an inventory of

2.1.2 Study 2. Entrepreneurial spirit: personal entrepreneurial orientation and start-up

Study 1: Study 2: Study 3: Study 4:

Figure 1. The four studies in relation to the development of Entrepreneurial Spirit

Table 1. Variables in regression analyses, indicative statistical values1.

(4a) Start-up Founded: yes/no (nom- As in 3 As in 3 As in 3 n ¼ 290

In a step-by-step procedure, the predictor groups ‘personality’, ‘environment/

3.1 Study 1. Start-up intentions among secondary school students

Table 2. Main results of regression analysis; Study 1.

Multiples R2 Signiﬁcance Signiﬁcant individual

(1) Personality 0.197 0.000 Need for achievement (0.14)

Dependent variable: Start-up intentions (Entrepreneurial orientation, Start-up inclination, Start-up

3.2 Study 2. Start-up intentions among university-level students

Table 3. Main results of regression analysis; Study 2.

Multiples R2 Signiﬁcance Signiﬁcant individual

(1) Personality 0.131 0.000 Need for achievement (0.21)

Dependent variable: Integrated dependent variable (Entrepreneurial orientation, Start-up inclination,

3.3 Study 3. Start-up probability of potential business founders

Multiples R2 Signiﬁcance Signiﬁcant individual

(1) Personality 0.056 0.000 Risk propensity (0.19)

Dependent variable: Start-up probability; x ¼ 77.8, SD ¼ 24.0; right-shifted distribution.

results of our step-by-step regression analysis (dependent variable: start-up

3.4 Study 4. Longitudinal start-up success and business success

Table 5. Main results of regression analysis; Study 4 – Dependent variable

Multiples R2 Signiﬁcance Signiﬁcant individual

(1) Personality 0.037 0.012 Risk propensity (0.17)

Dependent variable: Start-up success (start-up realized after 3 years: yes/no).

Table 6. Main results of regression analysis; Study 4 – Dependent variable:

(1) Personality 0.023 0.014 Risk propensity (0.14)

Dependent variable: Business success (Existence after 3 years: yes/no).

Table 7. Main results of regression analysis; Study 4: Dependent variable –

(1) Personality 0.005 0.498 –

3.5 Comparison of the four studies

In our comparison of the four studies presented, we assumed a certain degree of

Study 1 Study 2 Study 3 Study 4

Figure 2. Proportion of explained variance from start-up intentions to

4.1 Main ﬁndings

4.2 Methodological considerations

Let us ﬁrst turn to a number of methodological considerations: in eﬀect, the

Frank, H. and Wanzenböck, H. 1994 Insolvenzquoten und Entwicklungslinien von gefo¨rderten

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