Personality is related to labor market success, and entrepreneurship differs from paid employment in several ways. In this research, we examine the relationship between six personality traits (neuroticism, extraversion, sociability, hostility, self-confidence, and conscientiousness) and outcomes associated with two different phases of the entrepreneurial process: selection into entrepreneurship and subsequent entrepreneurial success. We utilize register panel data on employment characteristics over a 20-year period.
Our results show that self-confidence is associated with entry into entrepreneurship, and this trait is also associated with entrepreneurial success in terms of higher survival probability and 6–20 percent higher entrepreneurial income and the firm’s labor productivity.
Self-confidence may not be stable and can change. Therefore, providing support that enhances people’s self-confidence may promote both entrepreneurship and entrepreneurial performance in society.