A Longitudinal Investigation of the Impact of Family Background and Gender on Interest in Small Firm Ownership

Abstract

Entrepreneurs and small business owners have received a considerable amount of research attention. Much of this research has focused on how these individuals are different from the non-entrepreneurs, particularly how they differ with regard to personal characteristics. The majority of this research has investigated entrepreneurs or small business owners, looking retrospectively for the reasons that they decided to open a business. This retrospective technique, however, poses two potential problems: hindsight might artificially clarify or change the description of the process; and the retrospective procedure allows only an indirect comparison with those who do not own businesses. There has been considerably less research that examines business ownership in a prospective fashion (Carsrud 1989; Guth, Kuraswamy, and McErlean 1991; Krueger 1993; Long and McMullen 1984). In fact, although this has been suggested as a direction for future research (for example, Learned 1992), empirical evidence is minimal. Recent theoretical pieces provide further impetus to move ahead with research in this area (Krueger and Carsrud 1993). In order to better understand and encourage tomorrow's entrepreneurs, as well as to improve the chances of family firm successions, the determinants of small business ownership interest need to be more fully explored. While researchers have noted that economic factors play a role in firm start-ups, considerable attention has focused on individual characteristics (Reynolds and Miller 1992). By understanding better why individuals start businesses, it may be easier to offer assistance to them. In addition, this research may help individuals interested in family firm succession. As the transmission of ownership from generation to generation in the family business is often unsuccessful (Ward 1988), understanding the causes of an individual's motivation to take over the family firm or start a business of his or her own may be useful. Many authors have suggested that role models are important in the decision to start a business (Cooper and Dunkelberg 1984; Cooper 1986; Holland 1973; Krueger 1993; Shapero and Sokol 1982; Timmons 1986; Waddell 1983). Others have stated that the gender of the individual may be another influential factor (Aldrich 1989; Birley 1986; 1989; Birley, Moss, and Sanders 1987; Bellu 1993; Masters and Meier 1988). While anecdotal evidence and some empirical evidence (Hagan, Rivchun, and Sexton 1989; Scherer, Brodzinski, and Wiebe 1990) might suggest that males are more likely to be interested in small firm ownership than females, recent reports indicate that women are becoming entrepreneurs at a much faster rate than men (Zellner et al. 1994). Considering the influences of role models and potential gender differences, two interesting questions emerge: Are men and women equally influenced by role models? Does this influence change over time and if so, how? The present study focuses on following men and women over a five year period as they begin to make career choices. Specifically, we are interested in the impact of role models (specifically, family background) and gender on interest in small firm ownership over a five-year period subsequent to graduation from college. Small Firm Ownership The focus of this study is on the interest of individuals in small firm ownership. While it is possible to differentiate between the types of small firm ownership (that is, self-employment, small business, entrepreneurial, and family business ventures), this study focuses on all small business types in the aggregate. That is, the focus of this study is on interest in small firm ownership, be it a small, entrepreneurial, or family-based venture. Much of the research on these types of firms has focused on similar determinants of the creation and/or maintenance of these businesses such as the impact of role models. As longitudinal research is not common in any of these areas, this study will attempt to look at small firm ownership in general and references will be made to the various types of small firms throughout the paper. …