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| Author: | Norton, W.I. Jr. Moore, W.T. |
| Title: | The influence of entrepreneurial risk assessment on venture launch or growth decisions |
| Journal: | Small business economics
2006 : APR, VOL. 26:3, p. 215-226 |
| Index terms: | entrepreneurship risk analysis new enterprise venture capital companies growth decision making models |
| Language: | eng |
| Abstract: | In this paper, it is argued that differences in information, not risk aversion, may explain the decision to launch or grow a venture. Risk taking propensity (here as: r-t-pry.) and risk assessment (as: r-ast.) are separately tested. It is hypothesized that entrepreneurs (as: entrs.) will not differ from non-entrepreneurs (as: non-entrs.) on r-t-pry. In addition, a model of r-ast. is proposed and tested, using a sample (n=53) with 30 respondents declaring themselves as entrs. and 23 as non-entrs. For this simulation study, each respondent is provided with data on a potential acquisition that would result in either the launch of a new venture or significant growth for an existing firm. Consistent with the hypotheses, the results show no difference btw. entrs. and non-entrs. on the risk taking measure. It is also found that entrepreneurial behavior based on r-ast. can be predicted. |
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