Panel Study of Entrepreneurial Dynamics

The Carl H. Lindner College of Business and the UC Center for Entrepreneurship and Commercialization, in partnership with the Xavier Entrepreneurship Center, are a charter member of the Panel Study of Entrepreneurial Dynamics (PSED) born out the formation of the Entrepreneurship Research Consortium (ERC in 1996). Led by Dr. Charles H. Matthews of UC and Dr. Sherrie Human of XU, the UC team has pursued research spanning perception of environmental uncertainty, planning sophistication, family background, capital formation, social networks, and expectations of growth.

New business formation is one of the most important economic and social activities for any society expecting economic growth and innovation. Yet, little systematic evidence exists about the fundamental nature of the business start-up or entrepreneurial process. The Panel Study of Entrepreneurial Dynamics (PSED) was designed to fill that void and substantially enhance our understanding of this important phenomenon. The PSED is a national longitudinal sample of 64,622 U.S. households that were contacted to find individuals actively engaged in starting new businesses. The survey identified a panel of 830 nascent entrepreneurs willing to provide information about their business start-up activities. The efforts of these people were then followed over a two-year period. More than 120 scholars participated in the development of the PSED. Since this project was initially conceived in 1996, 33 universities, private foundations and for-profit institutions, as well as the National Science Foundation, and the Ewing Marion Kauffman Foundation have provided more than $2 million in financial support for the effort.

The PSED is the first reliable and generalizable data on the process of business formation. It includes information on the proportion and characteristics of the adult population attempting to start new businesses, the kinds of activities nascent entrepreneurs undertake during the business start-up process, and the proportion and characteristics of the start-up efforts that become infant firms. The study focuses on four fundamental questions:

  • Who is involved in starting businesses in the United States?
  • How do they go about the process of starting companies?
  • Which of these business start-up efforts are likely to result in new firms?
  • Why are some of these business start-up efforts successful in creating high-growth businesses?

Data for the PSED were collected in three stages. The first stage involved a telephone survey of 64,622 households to create two samples (nascent entrepreneurs and a comparison group) that are representative of the national population of adults 18 years old and older. In the second stage of the process individuals in the two samples responded to a detailed phone interview followed by the completion of a mailed questionnaire. The third stage involved follow-up interviews (phone and mail questionnaires) with the nascent entrepreneurs. This was done twice, at 12 and 24 months after the first interview. This report includes results only from the first stage of the initial sample of 64,622 households and the screening interviews.

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