In this study published in 2006, researchers aimed to investigate the relationship between testosterone levels, risk-taking propensity, and entrepreneurial behavior. The study found that individuals with higher salivary testosterone levels are more likely to behave entrepreneurially, and that testosterone is positively related to risk propensity. The study also found that risk-taking propensity partially mediates the relationship between testosterone and entrepreneurship.
Testosterone is associated with risk-taking, assertiveness, fearlessness, and persistence, which has also been linked to entrepreneurship. This association is shown through various studies conducted on humans and animals, indicating a connection between testosterone and dominance-seeking and status-seeking behaviors.
However, the link between testosterone and entrepreneurship is not direct, as entrepreneurship is a socially constructed term with no objective testing procedures. Nevertheless, there is considerable overlap between the entrepreneurship and testosterone literatures, particularly with regard to risk-taking. It is generally believed that entrepreneurs have a greater propensity for risk than non-entrepreneurs. Although this view is controversial, various researchers have found empirical support for the relationship between risk propensity and entrepreneurship.
The study looked at the relationship between testosterone levels and entrepreneurial behavior, specifically full-time involvement in creating a new venture. Data were collected from 31 MBA students with significant prior involvement in new venture creation and from 79 other student subjects with no new venture start-up experience. The 31 male participants categorized as entrepreneurs had led a new venture, with average annual revenues of $600,000 (Canadian dollars) and an average firm size of seven employees.
The study was limited to only male participants due to sample size constraints, with 166 out of 205 male students initially chose to fully participate in the study. The number of female participants was small, and only four of them identified themselves as having prior entrepreneurial experience. Additionally, females taking oral contraceptives were asked to exclude themselves from the study as it artificially suppresses testosterone levels. The researchers noted that assaying female saliva would also have incurred added expense and the fact that testosterone affects males and females differently. As basal testosterone levels are substantially different for males and females, pooling male and female data was inadvisable, therefore all females were excluded from the study.
In conclusion, the results of the study indicate that there is a positive relationship between salivary testosterone levels and entrepreneurial behavior. More specifically, this relationship is mediated by risk propensity. While the study focused on a biological attribute, it is important to note that entrepreneurial behavior is influenced by a wide range of social and environmental factors as well. The findings suggest that biological differences, such as testosterone levels, can play a role in understanding entrepreneurial behavior. While not a single determining factor, an individual's testosterone level can contribute to their likelihood of engaging in entrepreneurial activities. These findings highlight the importance of considering biological factors when studying entrepreneurship, and suggest that heuristics and biases used by entrepreneurs may have a biological basis.
Study Title: Entrepreneurs and evolutionary biology: The relationship between testosterone and new venture creation
Study Link: https://www.sciencedirect.com/science/article/abs/pii/S0749597805001391