Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm University, Swedish Institute for Social Research

No 7/2017: On the Origins of Entrepreneurship: Evidence from Sibling Correlation

Matthew Lindquist , Joeri Sol , C. Mirjam van Praag and Theodor Vladasel
Additional contact information
Matthew Lindquist: Swedish Institute for Social Research, Stockholm University, Postal: SOFI, Stockholm University, SE-106 91 Stockholm, Sweden

Abstract: 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.

Keywords: Entrepreneurship; Family Background; Intergenerational Persistence; Neighborhood Effects; Occupational Choice; Sibling Correlations

JEL-codes: D13; J62; L26

58 pages, October 17, 2017

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