Entrepreneurship and Well-Being: Accounting for the Heterogeneity of Entrepreneurs

Abstract

Entrepreneurship research has predominantly highlighted autonomy as the central source of the well-being bonus that entrepreneurs receive compared to employees. However, an important complementary explanation of entrepreneurs’ well-being has received less attention: entrepreneurship as a source of benevolence. We contribute to research on entrepreneurship and well-being by combining self- determination theory (SDT) with Schwartz’s value theory to develop a novel framework that (i) introduces benevolence as a relevant psychological need in addition to autonomy, and (ii) includes heterogeneity in both need strength and perceived need fulfillment regarding autonomy and benevolence in explaining individuals’ entrepreneurial choices and ultimately their well-being. Using individual-level European Social Survey (ESS) data comprising 32 countries over the time period 2002 to 2016, our analysis reveals heterogeneity in individuals’ need strenghts regarding autonomy and benevolence and different effects on their entrepreneurial choices (i.e. being an entrepreneur in a commercial or social sector). Furthermore, we find that the perceived fulfillment of both needs have different effects on well-being depending on individuals’ choices for entrepreneurship in social or commercial sectors.