In this paper we explore the relationship between the individual decision to become anentrepreneur and the institutional context. We pinpoint the critical roles of property rights andthe size of the state sector for entrepreneurial activity and test the relationships empirically bycombining...

There is no robust empirical support for the effect of financial incentives on the decision to work in selfemploymentrather than as a wage earner. In the literature, this is seen as a puzzle. We offer a focus on theopportunity cost, i.e. the wages given up as an employee. Information on income...

This paper analyses the effect of risk attitudes of firm owners on profits among micro and small enterprises (MSEs) in Lagos, Nigeria. Higher risk perceptions are shown to have a significant positive effect on profits, whereas risk propensity has a negative or no effect. Education, age, being...