Are More Conscientious Entrepreneurs More Likely to Fail?

Which Big-Five personality traits drive entrepreneurial failure in highly innovative firms?

Sebastian Wilfling
Friedrich Schiller University Jena, Department of Economics
Uwe Cantner
Friedrich Schiller University Jena, Department of Economics
Rainer K. Silbereisen
Friedrich Schiller University Jena, Institute of Psychology

Abstract:
The relation between the comprehensive personality of highly innovative entrepreneurs and their disposition to fail is still strongly underinvestigated. Therefore in this paper a dataset consisting of 423 entrepreneurs from the German federal state of Thuringia is employed in order to examine the relationship between the Big-Five personality traits (conscientiousness, extraversion, agreeableness, openness, neuroticism) and entrepreneurial failure in highly innovative industries. Correspondingly, we identify seemingly successful discontinuances as far as possible with the help of a credit rating. We find evidence that higher agreeable entrepreneurs have a lower probability to fail at all ages, while a higher level of conscientiousness increases the hazard rate at the time of entry, even if this effect diminishes over time. In contrast, neuroticism, openness, and extraversion are seemingly not related to the hazard of entrepreneurial failure.