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Are Nascent Entrepreneurs Jacks-of-all-trades? A Test of Lazear's Theory of Entrepreneurship with German Data*

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Wagner, Joachim

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Abstract Abstract: In a recent paper Edward Lazear proposed the jack-of-all-trades view of entrepreneurship. Based on a coherent model of the choice between self-employment and paid employment he shows that having a background in a large number of different roles increases the probability of becoming an entrepreneur. The intuition behind this proposition is that entrepreneurs must have sufficient knowledge in a variety of areas to put together the many ingredients needed for survival and success in a business, while for paid employees it suffices and pays to be a specialist in the field demanded by the job taken. This paper contributes to the entrepreneurship literature by empirically testing Lazear's hypothesis using a large recent representative sample of the German population. The empirical estimation takes the rare events nature of becoming a nascent entrepreneur and the regional stratification of the sample into account. The results illustrate the statistical significance and economic importance of the jack-of-all-trades theory.
Document language English
Publication Year 2006
Page/Pages p. 2415-2419
Journal Applied Economics, 38 (2006) 20
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)