published in: Applied Economics Quarterly, 2003, 49 (3), 255-272
Folklore has it that the comparatively low proportion of self-employed in Germany is in part
due to a habit that might be termed 'stigmatisation of failure': taking a second chance to build
one's own firm after failing as a self-employed is said to be much more difficult here than in
other countries. This paper uses data from a large recent survey in ten German planning
regions to document that 18 percent of today’s firm owners founded a firm in the past that
went out of business in between, and that 8 percent of people who went out of business with
their former firm are actively engaged in starting a new business today. The determinants of
such a restart are investigated econometrically. It turns out that both individual and regional
factors are important for the probability of taking a second chance: This probability is
negatively related to age, attitude towards risk, and the share of persons in the region who
failed in the past, while it is positively related to personal contacts with a young entrepreneur
and the regional share of nascent entrepreneurs.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.