Koch, Melanie; Menkhoff, Lukas - In: Small Business Economics 64 (2025) 4, pp. 1643-1670
Entrepreneurs tend to be risk tolerant but is higher risk tolerance always better? In a sample of about 2100 small businesses, we find an inverted U-shaped relation between risk tolerance and profitability. This relationship holds in a simple bilateral regression, and even after controlling for...