The Attitude towards the Risk of Entrepreneurial Activity: Evidence from Chile

We study the factors that may influence the attitude toward the risk of entrepreneurial activity and its impact on the propensity to become an entrepreneur. We proxy the attitude toward risk by using the answers to the fear of failing question contained in the Global Entrepreneurship Monitor survey. Interesting results are found. First, we found that being male, having more years of formal education and believing to have the necessary skills to develop a new venture all have a negative effect on an individual’s attitude toward risk and therefore, increase the probability of becoming an entrepreneur. Age affects the risk in a quadratic way (first positive but after some point negative). Finally, contrary to conventional wisdom, having the experience of shutting down a business has no effect on the risk’s attitude for developing a new venture in the Chilean case.