DP11562 On the Origins of Entrepreneurship: Evidence from Sibling Correlations

Author(s): Matthew Lindquist, Joeri Sol, Mirjam van Praag, Theodor Vladasel
Publication Date: October 2016
Date Revised: November 2017
Keyword(s): Entrepreneurship; Family Background; Intergenerational Persistence; Neighborhood Effects; Occupational Choice; Sibling Correlations.
JEL(s): D13, J62, L26
Programme Areas: Labour Economics, Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11562

We assess the broad importance of family and community background for entrepreneurship outcomes. We go beyond traditional, intergenerational associations by estimating sibling correlations in unincorporated and incorporated entrepreneurship using register data from Sweden. Sibling correlations range from 20% to 50%. They are consistently higher for more committed and incorporated entrepreneurship than for less committed or unincorporated entrepreneurship; they are also higher for brothers than sisters. We then assess what factors drive these correlations: parental entrepreneurship, neighborhoods, shared genes and financial resources help explain these high correlations, whereas immigration status, family structure and sibling peer effects have a limited contribution. The higher correlation for incorporated versus unincorporated entrepreneurship is explained mainly by the type of parental entrepreneurial engagement and financial resources, while the gap between brother and sister correlations in unincorporated entrepreneurship is largely driven by the geographic concentration of male dominated industries