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Small Business Journal
The genetics of entrepreneurial performance

Scott Shane and Nicos Nicolaou
International Small Business Journal 2013 31: 473 originally published online 13 May 2013
DOI: 10.1177/0266242613485767
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Scott Shane
Case Western Reserve University, USA
Nicos Nicolaou
University of Cyprus, Cyprus and Cass Business School, City University London, UK
Future Directions in Entrepreneurship Research Series

Introduction and Foreword
Susan Marlow: Editor
One of the most rewarding and exciting aspects of working within the field of entrepreneurship
is the multi-disciplinary aspect of this research and the diversity of opportunities this presents
to progress theoretical development, methodological debates, empirical reach and practical
contribution. However, this dynamic and un-folding field provokes challenging and intellec-
tually stimulating opportunities for diverse proponents to engage with competing strands of
entrepreneurship research to defend, clarify and argue their cause. To this end, we have initi-
ated an occasional series of articles outlining and exploring novel and possibly, controversial
‘future directions in entrepreneurship research’. We are delighted that Professor Scott Shane
and Professor Nicos Nicolaou have contributed the inaugural article exploring the influence
of genetics upon entrepreneurial performance. Given the recent expansion in diverse strands
of research such as the influence of context upon entrepreneurship and entrepreneuring as a
social process plus of course, persistent government policy imperatives to transform increas-
ing numbers of people into entrepreneurs regardless of resources, abilities or willingness, this
article and the issues it raises, is very timely. We would like to thank both Scott and Nicos for
their interesting and thought provoking discussion. In addition, appreciation is extended to the
several anonymous referees who offered insightful and helpful comments upon earlier drafts
of the manuscript.
Susan Marlow
Editor
Corresponding author:
Nicos Nicolaou, Department of Public and Business Administration, University of Cyprus, PO Box 20537, Nicosia 1678,
Cyprus
Email: nicos.nicolaou.1@city.ac.uk and nicos.nicolaou@ucy.ac.cy
474 International Small Business Journal 31(5)
Abstract
Behavioral genetics techniques were applied to a sample of self-employed monozygotic (MZ) and
dizygotic (DZ) twins from the USA to examine whether genetic factors influence entrepreneurial
performance. The study found that genetics affects the amount of income earned by self-employed
people. In addition, the study found that common genes influenced the phenotypic correlations
between three of the ‘big five’ personality characteristics – agreeableness, openness to experience
and extraversion – and self-employment income, but due to the small sample size, the confidence
intervals were high. The implications of a genetic component to self-employment income for
research on entrepreneurship are discussed.
Keywords
behavioural genetics, big five personality characteristics, entrepreneurial performance
Introduction
Recently, scholars have begun to examine if genetic factors influence whether or not people
become entrepreneurs (Nicolaou et al., 2008; Zhang et al., 2009). This research has shown that
genes partly affect the likelihood of engaging in entrepreneurship, whether measured as being an
owner-operator of a business, having started a business, having engaged in the new business cre-
ation process or being self-employed (Nicolaou et al., 2008). Moreover, genetic factors influence
whether or not people identify new business opportunities, and the same genetic factors that influ-
ence opportunity identification also partly influence new business creation (Nicolaou et al., 2009;
Shane et al., 2010a). In short, research shows that part of the reason why some people and not
others become entrepreneurs is innate1 (White et al., 2006, 2007).
However, what about the performance of entrepreneurial activity? Does it also have a genetic
component? To date, these questions remain unanswered. A genetic component to performance
at self-employment is plausible, given the evidence of the heritability of work outcomes in gen-
eral. Studies show that 77 percent of occupational status is accounted for by genetic factors
(Lichtenstein et al., 1992; Tambs et al., 1989), and that 37 percent of the difference between
people in ‘censured job performance’ is genetic (Illies et al., 2006). Studies of identical and fra-
ternal twins show that about 45 percent of the variation between adults in their annual incomes
is the result of genetic factors (Behrman et al., 1980). Moreover, scientists have found that about
40 percent of the variance between people in hourly wages (Ashenfelter and Krueger, 1994;
Behrman et al., 1980), and about 27 percent of the difference in personal earnings, is genetic
(Schnittker, 2008).
If performance at entrepreneurial activity has a genetic component, another question is: why?
The theory of person–job fit (Edwards, 1996; Kristof, 1996; Lauver and Kristof-Brown, 2001)
offers one possible explanation. According to the person–job fit literature, individuals with appro-
priate attributes for jobs perform better than those without such attributes. Research shows that
people have many attributes that influence their fit with jobs, ranging from skills and attitudes to
personality (Lauver and Kristof-Brown, 2001). While not negating the possibility that other indi-
vidual attributes that influence person–job fit are also a mechanism through which genetic factors
influence entrepreneurial performance, this article will argue for, and then empirically test, whether
entrepreneurs whose genetic endowment predisposes them to develop personality characteristics
favorable to entrepreneurship perform better at running their own businesses than those whose
genetic endowment does not predispose them to develop entrepreneurship-favorable personality
characteristics.
Shane and Nicolaou 475
That a genetic predisposition to develop an entrepreneurship-favorable personality affects per-

formance at self-employment is plausible, given previous research on the manner in which genet-
ics affects entrepreneurial activity. Researchers have posited that one mechanism through which
genetic factors influences entrepreneurial activity is by affecting the predisposition to develop
personality traits associated with entrepreneurship. Looking at two datasets of twins – one from the
UK and the other from the USA – Shane et al. (2010b) found evidence of genetic covariation
between the ‘big five’ personality characteristics and the tendency to engage in entrepreneurship
(Shane et al., 2010b). Here, we seek to examine whether the genetic effects on the predisposition
to develop personality traits associated with entrepreneurship have implications for entrepreneurial
performance. Specifically, we describe the results of a behavioral genetics study of 1996 twins
surveyed as part of the National Survey of Midlife Development in the United Stated (MIDUS), a
representative national sample of approximately 50,000 people that was screened initially for the
presence of a twin and one of the datasets examined in the Shane et al.’s (2010b) study. However,
unlike this earlier study, only those twins who were both self-employed could be examined for
analysis of entrepreneurial performance, leaving a sample of 148 twins, comprising 94 identical
and 54 fraternal2 twins.
We examine the heritability of self-employment income and apply multivariate genetics tech-
niques to examine the cross-characteristic–cross-twin correlations between the big five personality
characteristics and self-employment income. As long as identical and fraternal twins share similar
environments to their co-twins (an assumption that research has shown to be robust; Lykken et al.,
1993; Plomin et al., 2008), greater cross-characteristic–cross-twin correlations between the big
five and self-employment income of identical twins than that of fraternal twins would indicate that
genetic factors contribute to the phenotypic correlation between the two attributes. Because per-
sonality and self-employment income cannot change an individual’s genetic make-up, greater
identical than fraternal cross-characteristic–cross-twin correlations would indicate that the same
genetic factors influence both the tendency to have the aspects of personality and self-employment
income. If, on the other hand, the same genetic factors do not influence the big five personality
dimensions and self-employment income, then there would be no difference in the cross-characteristic–
cross-twin correlations between identical and fraternal twins.
Identifying whether performance at entrepreneurial activity has a genetic component, and
whether the fit of people with certain personality characteristics to the occupation of entrepreneur
is one of the mechanisms through which genes influence this performance, is important if we are
to build a more comprehensive and integrative theory of entrepreneurship. To go beyond descrip-
tion, management scholars must develop and test explanations as to why some entrepreneurs are
more successful than others: doing this demands empirical investigations of entrepreneurial
performance.
The results also have implications for theories of occupational choice reliant on person–job fit;
these theories have proposed that individuals often choose their jobs to fit their personalities, and
that job performance reflects the match of personality to job characteristics (Kristof, 1996). As
personality characteristics are partly innate, some portion of person–job fit may reflect individuals
fitting their jobs to their genetic endowments. Moreover, understanding the common genetic aeti-
ology between personality and entrepreneurial performance is important to suggest what measures
may be taken to encourage people to be successful at this vocation. If the entire covariance between
personality characteristics and entrepreneurial performance is accounted for by genetic factors,
then it may be harder to influence the level of entrepreneurial performance by encouraging devel-
opment of the associated personality characteristics, than if no shared genetic factors influenced
personality characteristics and entrepreneurial performance.
Theoretical development
Our core argument is that genetic factors influence entrepreneurial performance through their
influence on personality (for an excellent discussion of the psychology of entrepreneurs, see Baum
et al., 2007; Frese, 2009; Rauch and Frese, 2000, 2007). We propose that genetic endowments
predispose individual’s to develop certain personality characteristics. Some personality character-
istics are a better fit with entrepreneurship than others: those with personality characteristics con-
ducive to entrepreneurship will tend to be more successful at entrepreneurship than those without
those personality characteristics.
This line of reasoning begins with the origins of personality. While our argument would apply
to all dimensions of personality, we concentrate here on the ‘big five’ this model of personality is
one of the most comprehensive and parsimonious personality taxonomies (Costa and McCrae,
1992). Although scholars have used somewhat different labels for the five personality characteris-
tics making up this taxonomy, the five factors are: extraversion, openness to experience, agreeable-
ness, conscientiousness and emotional stability (Barrick and Mount, 1991).
While many factors influence the development of these characteristics, from life experiences to
how one is raised, research shows that some of the variance across the big five is accounted for by
their genetic endowment (Jang et al., 1996; Loehlin, 1992; Plomin et al., 2008). A wide range of
studies conducted in numerous countries and using a number of different methodologies show
heritabilities exceeding 50 percent for most of these characteristics (Wright, 1999). Moreover,
molecular genetics research has shown recently that people with different variants of certain genes
face different probabilities of developing the big five personality characteristics (Comings et al.,
2000; Ebstein et al., 2002).
The person–job fit framework holds that job performance depends in large part on whether a
person has the right attributes for their job (Kristof-Brown et al., 2005). While a number of differ-
ent attributes are important in assessing person–job fit, from skills to attitudes, one important
category of these individual characteristics is personality (Kristof, 1996). When attributes are
difficult to change, having those that are a good fit for a job enhances performance. Because per-
sonality characteristics are difficult to change, people whose personalities fit their jobs perform
better than people whose personalities do not fit (Edwards, 1996; Kristof, 1996; Lauver and
Kristof-Brown, 2001) across a number of dimensions of job performance, including turnover,
stress, pro-social behaviors, performance appraisal scores, odds of promotion, salary raises and
income (Kristof, 2006).
While the person–job fit argument has been primarily applied to people who work for a salary
in established organizations, Markman and Baron (2003) have extended the argument to entrepre-
neurship. Kristof explained that a job is the set of ‘tasks a person is expected to accomplish in
exchange for employment, as well as the characteristics of those tasks’ (1996: 8). Markman and
Baron (2003) argued that by this definition, entrepreneurship is a job and that certain individual
attributes make some people a better or worse fit for it. Zhao et al. (2010) explain that those whose
personalities fit entrepreneurship will be able to take the actions needed to be successful at it, ‘with
less conscious effort or strain and will be more satisfied, committed and motivated in those situa-
tions’ (2010: 384). Because performance at entrepreneurship depends largely on the entrepreneur’s
actions, the fit between personality and the task demands of entrepreneurship will influence
performance.
Rauch and Frese provide empirical support for this proposition. Conducting a meta-analysis
of the effect of personality characteristics on entrepreneurial performance, they explain: ‘the
results indicate that characteristics matched to the task of running a business produced higher
effect sizes with business creation than characteristics that were not matched to the task of
running an enterprise’ (2007: 353). In short, because certain personality characteristics make
some individuals more fit for entrepreneurship, people with the appropriate personality charac-
teristics will have higher performance at entrepreneurship than those without such
characteristics.
Hypotheses development
The sections below develop specific hypotheses about genetic correlations between each of the big
five personality characteristics and entrepreneurial performance that are derived from the applica-
tion of the theory of person–job fit. It is important to note that in the arguments leading up to the
hypotheses, we summarize evidence from molecular as well as quantitative genetics studies of
personality. Therefore, we make reference to specific genes that researchers have identified as
being associated with the different aspects of personality. We do this to be comprehensive in our
review of the genetics of personality characteristics. However, our study is a quantitative genetics
study, and does not test for the effect of specific genes on entrepreneurial performance.
Extraversion
Extraversion is an aspect of personality that includes characteristics such as sociability, talkative-
ness, assertiveness and ambition (Barrick and Mount, 1991). This personality trait has a substan-
tive genetic component, with different studies estimating its heritability from 0.49 (Waller, 1999)
to 0.56 (Riemann et al., 1997). Moreover, some evidence indicates that several neurotransmitter
genes influence the odds of developing an extraverted personality (Farde and Gustavson, 1997).
Being extraverted is valuable for entrepreneurs because they need to spend a lot of time interact-
ing with investors, employees and customers, and have to sell the value of the new business (Shane,
2003). Empirical research confirms the proposition that extraverts perform better as entrepreneurs
than introverts so, for instance Baron and Markman (2003) found that extraverted entrepreneurs
raised more capital and had higher income than introverted ones whilst Morrison et al. (2003)
found that the performance of franchisees is enhanced by extraversion. Most importantly, Zhao
et al. (2010) conducted a meta-analysis of nine studies that examined the relationship between
extraversion and entrepreneurial performance, and found a positive and significant association.3
Because genetic factors influence the odds that people will be extraverted (Loehlin, 1992) and
extraverts perform better at entrepreneurship than introverts, the same genetic factors might affect
both extraversion and entrepreneurial performance. This leads to the first hypothesis:
H1: Common genetic factors account for some of the covariance between extraversion and self-employ-
ment income.
Openness to experience
Openness to experience characterizes someone who is open to novel experiences and ideas, and
who is imaginative, innovative and reflective (Costa and McCrae, 1992; McCrae, 1987). This per-
sonality trait has a substantial genetic component, with heritability estimates of between 0.45
(Loehlin, 1992) and 0.56 (Loehlin et al., 1998). Research also shows an association between vari-
ants of specific genes and openness to experience, most notably the DRD4 gene, which affects the
development of dopamine receptors in the brain (Comings et al., 1999).4 Being open to experience
is valuable for entrepreneurs, because they need to explore new ideas and take innovative
approaches to the development of products and the organization of businesses (Zhao and Seibert,
2006). Moreover, successful entrepreneurial performance is enhanced by information monitoring

and learning about customers, markets and technologies: behaviors that are more common among
people high in openness to experience (Zhao et al., 2010).
Empirical research confirms the positive association between openness to experience and entre-
preneurial performance. In a long-term study of self-employed people in Wisconsin, Patel (2009)
found that people higher in openness to experience were less likely than other people to exit from
self-employment; indeed, Zhao et al.’s (2010) meta-analysis of 15 studies showed that openness to
experience was positively and significantly related to entrepreneurial performance. Because
genetic factors influence the odds that people will be open to experience (Loehlin, 1992) and those
open to experience perform better at entrepreneurship, the same genetic factors might affect both
openness to experience and entrepreneurial performance. This leads to the second hypothesis:
H2: Common genetic factors account for some of the covariance between openness to experience and self-
employment income.
Agreeableness
Agreeableness characterizes someone who is cooperative, trusting, forgiving, tolerant, courte-
ous and soft-hearted (Barrick and Mount, 1991). This personality trait has a substantial genetic
component, with heritability estimates ranging from 0.33 (Waller, 1999) to 0.42 (Riemann
et al., 1997). Researchers also have identified variants of several genes that are associated with
agreeableness, including DRD4, 5-HTTLPR, 5HT2C, DAT1, SPB, PNMT, GABRA6, OXYR,
CYP19, NMDAR1 and CNRA4 (Comings et al., 1999, 2000; Hamer and Copeland, 1999;
Lesch et al., 1996).
Agreeable people are believed to perform worse at entrepreneurial activities than disagreeable
people, because the former are less likely to pursue their own self-interest, drive difficult bargains
or use others to achieve their objectives (Zhao and Siebert, 2006). Less agreeable people are also
more skeptical (Costa and McCrae, 1992), making them more likely to have a critical approach to
assessing business information (Shane, 2003). Although no empirical research directly confirms
the negative association between agreeableness and performance at entrepreneurship, some
indirect evidence suggests this hypothesis. Zhao and Siebert’s (2006) meta-analysis showed
that agreeableness was negatively associated with the tendency to be an entrepreneur. Moreover,
a meta-analysis by Rauch and Frese (2007) found aspects of the personality trait of agreeable-
ness to be associated with entrepreneurial performance. For example, they showed that prefer-
ence for autonomy and independence, which are negatively associated with agreeableness, are
positively related to entrepreneurial performance. Because genetic factors influence the odds that
people will be agreeable (Loehlin, 1992), and agreeable people perform worse at entrepreneurship,
the same genetic factors might affect both agreeableness and entrepreneurial performance. This
leads to the third hypothesis:
H3: Common genetic factors account for some of the covariance between agreeableness and self-employ-
ment income.
Conscientiousness
Conscientiousness is a personality trait associated with dependability, hard work and persever-
ance (Barrick and Mount, 1991). This personality trait has a substantial genetic component, with
heritability estimates ranging from 0.29 (Bergeman et al., 1993) to 0.44 (Jang et al., 1996).
Moreover, studies show the association between variants of a number of genes and conscientious-
ness, including versions of the DRD2, DRD4, CNRA4, ADORA2A, 5-HTTLPR, HTR2C,
HTR2A, COMT, VMAT and 5HT2C genes (Benjamin et al., 1996; Comings et al., 2000; Ebstein
et al., 1997; Hamer, 2004; Hamer and Copeland, 1999; Noble et al., 1998; Plomin and Caspi,
1998; Reif and Lesch, 2003).
Entrepreneurial performance is believed to be positively associated with conscientiousness.
Conscientiousness helps entrepreneurs, since they need to be organized and deliberate to achieve
their goals. They also need to be persistent and invest the hard work necessary to overcome obsta-
cles, such as failure to obtain financing or cost overruns associated with the venturing process
(Locke and Baum, 2007; MacMillan et al., 1985; Timmons, 1989). Empirical research confirms
the positive association between conscientiousness and performance at entrepreneurial activities.
Ciavarella et al. (2003) found that entrepreneurs who are higher in conscientiousness have new
ventures that survive for longer periods of time. Baron and Markman (2003) found that conscien-
tious entrepreneurs had businesses that were more likely to survive and had higher income.
Moreover, Zhao et al.’s (2010) meta-analysis of 24 studies showed that conscientiousness was
positively related to entrepreneurial performance. Because genetic factors influence the odds that
people will be conscientious (Loehlin, 1992) and conscientious people perform better at entre-
preneurship, the same genetic factors might affect both conscientiousness and entrepreneurial
performance. This leads to the fourth hypothesis:
H4: Common genetic factors account for some of the covariance between conscientiousness and self-
employment income.
Neuroticism
Neuroticism is a personality trait associated with being anxious, worried, insecure, embarrassed and
emotionally unstable (Barrick and Mount, 1991). Twin and adoption studies from a variety of coun-
tries show that this personality trait has a heritability of between 27 and 68 percent across a variety of
different measurement (Carey, 2003; Jang et al., 1996; Loehlin and Martin, 2001; Loehlin et al.,
1998; Saudino et al., 1999; Viken et al., 1994; Zuckerman, 2005). Moreover, several studies have
identified specific genes that affect neuroticism, including 5-HTTLPR, 5HT1A, 5HT2C, CNRA4,
ADORA2A, GABRB3, TPH, ADRA2A, COMT and DRD4 (Benjamin et al., 1998; Comings et al.,
2000, 2003; Ebstein et al., 2002; Hamer and Copeland, 1999; Lesch et al., 1996; Strobel et al., 2003).
Neuroticism is negatively associated with entrepreneurial performance. People who are emo-
tionally stable perform better as entrepreneurs as they need a high tolerance to stress to cope with
the hard work, significant risks, social isolation, pressure, insecurity and personal financial diffi-
culties that may arise from business start-up (Rauch and Frese, 2007). Entrepreneurs cannot
worry excessively and need to be resilient in the face of setbacks when building a company (Zhao
and Siebert, 2006); in addition, they need to work in stressful and highly unstructured environ-
ments where the separation between family life and work life is often fuzzy. Empirically, Zhao
et al.’s (2010) meta-analysis of 29 studies confirmed the expected positive relationship between
emotional stability and entrepreneurial performance.
Because genetic factors influence the odds that people will be emotionally stable (Loehlin, 1992),
and such individuals perform better at entrepreneurship, the same genetic factors might affect both
emotional stability and entrepreneurial performance. This leads to the hypothesis:
H5: Common genetic factors account for some of the covariance between neuroticism and self-employ-
ment income.
Method
Analysis of twin data using structural equation modeling techniques enables us to estimate the
proportion of phenotypic variance and covariance due to genetic and environmental factors. The
variance of any variable can be disentangled into three (potential) components: a genetic compo-
nent (A), a shared environmental component (C) and a unique environmental component (E).
Because identical and fraternal twins share different degrees of genetic relatedness but similar
degrees of shared and unshared environments, the correlations between these different pairs of
twins can be used to estimate genetic influence on a variable and the co-variation between multiple
variables.
Quantitative genetic techniques

We follow quantitative genetic modeling techniques and use structural equation modeling to esti-
mate the genetic and environmental contributions to the variance in entrepreneurial performance,
and the covariance between the measures of the big five personality characteristics and entrepre-
neurial performance. For each characteristic we develop a heritability estimate, defined as the
proportion of total variation that can be explained by genetic variance. The univariate models are
estimated through the following structural equations:
Φiξ = aAiξ + cCiξ + eEiξ and VΦ = a2+ c2+ e2 = 1
where Φ is the phenotype5 of the ith individual in the ξth twin pair (i=1,2; ξ=1….n, with all vari-
ables scaled as deviations from zero) and VΦ is the total phenotypic variance of the population. VΦ
corresponds to the sum of additive genetic variance (a2), shared environmental variance (c2) and
non-shared environmental variance (e2).
We evaluate the contribution of A, C and E to the total variance through a series of nested mod-
els compared to the best-fitting saturated model. In order to select the most parsimonious model we
use the chi-square goodness of fit test, Akaike’s Information Criterion (Akaike, 1987) and the Root
Mean Square Error of Approximation (RMSEA) (Neale and Maes, 2002).
We apply bivariate genetics techniques to examine the cross-characteristic–cross-twin corre-
lations between each of the big five personality characteristics and entrepreneurial performance.
As long as monozygotic (MZ) and dizygotic (DZ) twins experience similar environments to their
co-twins, greater cross-characteristic–cross-twin correlations between a personality characteris-
tic and entrepreneurial performance for MZ twins than for DZ twins would imply that genetic
factors contribute to the phenotypic correlation between the two variables. Conversely, if the
cross-characteristic–cross-twin correlation is significant but of similar magnitude in both MZ
and DZ twin pairs, then a shared environmental influence would be indicated. A unique environ-
mental influence would be indicated if cross-characteristic–cross-twin correlation is absent
(Singer et al., 2006).
Thus, bivariate genetic analysis partitions the covariance between each personality characteris-
tic and entrepreneurial performance into that due to additive genetic effects (A), shared environ-
mental effects (C) and non-shared environmental effects (E) (Kuntsi et al., 2004; Singer et al.,
2006) (see Figure 1). Because MZ twins share their entire genetic profile and DZ twins share, on
average, 50 percent of their segregating genes, the correlation between the latent additive genetic
factors is constrained at 1 for MZ twins, and at 0.5 for DZ twins. Because each twin pair was raised
in the same family, the correlation between the latent shared environmental factors is held at 1 for
both MZ and DZ twins.
rA / 0.5 rA rC
rA / 0.5 rA rC
1 / 0.5 1 1 / 0.5 1
rA rC rE rA rC rE
AΔ CΔ EΔ AΩ CΩ EΩ AΔ CΔ EΔ AΩ CΩ EΩ
aΔ cΔ eΔ aΩ cΩ eΩ aΔ cΔ eΔ aΩ cΩ eΩ
Twin 1 Twin 1 Twin 2 Twin 2

Personality Entrepreneurial Personality Entrepreneurial
characteristic Performance characteristic Performance
(Δ) (Ω) (Δ) (Ω)
Figure 1. Path diagram for bivariate genetic analysis.

Note: A, C and E represent the additive genetic, shared environmental and non-shared environmental effects
respectively. rA, rC, and rE represent the genetic, shared environmental and non-shared environmental correlations
respectively.
The paths rA, rC and rE represent the genetic, shared environmental and non-shared environmen-
tal correlations respectively. The genetic correlation (rA) measures the extent to which the genetic
influences on an individual’s score for a personality characteristic overlap with those on self-
employment income, irrespective of the individual heritabilities of the two variables. (It is possible
for two variables to have very high heritabilities and no common genetic influences – i.e. an rA of
0 – or for two variables to have very low heritabilities but exactly the same genetic influences, i.e.
an rA of 1). The shared environmental correlation (rC) represents the degree to which the environ-
mental influences that make the twins more similar on the score for a personality characteristic are
correlated with the environmental influences that make the twins more similar on entrepreneurial
performance (Plomin et al., 2008). The non-shared environmental correlation (rE) captures the
environmental factors that twin pairs do not have in common, and that influence both the score on
the personality characteristic and entrepreneurial performance (Kendler and Prescott, 2006; Plomin
et al., 2008).
Equal environments assumption

Twin studies are based on the equal environments assumption, which states that the environments
that the twins face are similar for both types of twins (Plomin et al., 2008). For this assumption to
be violated, both factors must be true: environmental factors must treat MZ twins more similarly
than DZ twins; and the similarity in treatment must make a difference to the phenotype being
examined. If MZ twins have more similar experiences than DZ twins because they are more

personality characteristic personality characteristic SE income SE income
(Δ) (Δ) (Ω) (Ω)
Twin 1 aΩ2 + cΩ2 + eΩ2
personality
characteristic (Δ)
Twin 2 aΩ2 + cΩ2 aΩ2 + cΩ2 + eΩ2
personality
characteristic (Δ)
Twin 1
SE income rAa∆ aΩ + rc c∆ cΩ + rE e∆ eΩ rAa∆ aΩ + rc c∆ cΩ aΩ2 + cΩ2 + eΩ2
(Ω)
Twin 2
SE income rAa∆ aΩ + rc c∆ cΩ rAa∆ aΩ + rc c∆ cΩ + rE e∆ eΩ aΩ2 + cΩ2 aΩ2 + cΩ2 + eΩ2
(Ω)
Figure 2. Variance covariance matrix for the MZ twins.

personality characteristic personality characteristic SE income (Ω) SE income (Ω)
(Δ) (Δ)
Twin 1
aΩ2 + cΩ2 + eΩ2
personality
characteristic (Δ)
Twin 2 0.5aΩ2 + cΩ2 aΩ2 + cΩ2 + eΩ2
personality
characteristic (Δ)
Twin 1 rAa∆ aΩ + rc c∆ cΩ + rE e∆ eΩ 0.5rAa∆ aΩ + rc c∆ cΩ aΩ2 + cΩ2 + eΩ2
SE income
(Ω)
Twin 2
0.5rAa∆ aΩ + rc c∆ cΩ rAa∆ aΩ + rc c∆ cΩ + rE e∆ eΩ 0.5aΩ2 + cΩ2 aΩ2 + cΩ2 + eΩ2
SE income
(Ω)
Figure 3. Variance covariance matrix for the DZ twins.
similar genetically, this does not mean that the assumption is breached, because the differences
come from genetic factors (Plomin et al., 2008).
Different methodologies and techniques have been used to test the equal environments assump-
tion, and most sources have confirmed its robustness (Bouchard and Propping, 1993; Carey, 2003;
Hettema et al., 1995; Kendler et al., 1993; Scarr and Carter-Saltzman, 1979). Equal environments
exist for MZ and DZ twins, because many parents tend to randomize the environmental treatment
of their children. Some are misinformed or make wrong assessments about the zygosity of their
twins, leading some parents to raise their DZ twins as MZ twins, and other parents to raise their
MZ twins as DZ twins. Furthermore, some parents emphasize the similarity of their DZ twins by
dressing them identically, while others deliberately try to increase the individuality of their MZ
twins. As a result, researchers observe little systematic difference in the way that MZ and DZ twins
are treated by their parents. Given this evidence, Lykken et al. (1993) conclude that the equal envi-
ronments assumption holds, and that the proportion of phenotypic variance influenced by genetic
factors can be estimated from samples of MZ and DZ twins raised together.
Sample
We examined the twin sample of the National Survey of Midlife Development in the United States
(MIDUS). In this survey, a nationally representative sample of approximately 50,000 people was
screened initially for the presence of a twin. The twins that were willing to participate were asked
to provide the contact details of their co-twins. Data were collected, primarily from 1995 to 1996,
from both twins through interviews and postal questionnaires, with a follow-up between 2004 and
2006. Between the initial survey and the follow-up, the twins completed one hour of telephone
surveys and two written surveys totalling 90 pages in length on a wide range of topics. Data on
income and psychological characteristics were obtained from the self-administered questionnaire.
In total, 1996 twins were recruited initially for the study. The zygosity of the twins was assessed
through DNA samples and standardized questions. Twins of unidentified zygosity and opposite-
sex DZ twins were excluded from further analysis. In the cases where there were multiple twin
pairs from the same family, one twin pair was chosen at random. Approximately 55 percent of the
twin sample was female. The average age was 45, with a standard deviation of 12 years. Slightly
more than one-quarter of the sample had a university education or higher, and 11 percent had less
than a high school education. For analysis of entrepreneurial performance, only those twins who
were both self-employed could be studied. These adjustments left us with 148 twins, comprising
94 MZ and 54 DZ twins.
Measures
Entrepreneurial performance. We examined the respondents’ self-employment income in dollars.
This operationalization of entrepreneurial performance is consistent with 70 other performance
studies reviewed by van der Sluis et al. (2005) (which constitute 54% of the total number of per-
formance studies reviewed).
Big five personality characteristics. These were assessed using 25 self-descriptive items
(Goldberg, 1992; John, 1990; Trapnell and Wiggins, 1990). Each of the big five was measured
with between four and seven items (Goldberg, 1992; John, 1990; Trapnell and Wiggins, 1990).
The respondents were asked to indicate how well each item described them on a four-point scale
ranging from ‘not at all’ to ‘a lot’ (Lachman and Weaver, 1997). The scale construction had been
evaluated in an earlier pilot study conducted in 1994. The alpha internal consistency scores in
the MIDUS database were: 0.77 for openness to experience, 0.74 for neuroticism, 0.78 for extra-
version, 0.80 for agreeableness and 0.58 for conscientiousness (Lachman and Weaver, 1997).
Results
Consistent with prior behavioral genetics research, we observe substantial heritabilities for all five
personality characteristics. The chi-square test for goodness of fit for the model, the Akaike
Information Criterion (Akaike, 1987) and RMSEA showed that the best fitting model for each of
the big five personality characteristic test scores included additive genetic and non-shared
Table 1. Summary statistics for MZ and DZ twins.
Variable MZ DZ p-value
1. Self-employment 37042.87 32911.80 0.57
income
2. Agreeableness 3.52 3.54 0.75
3. Extraversion 3.21 3.26 0.56
4. Neuroticism 2.20 2.20 0.94
5. Conscientiousness 3.39 3.36 0.65
6. Openness to 3.04 3.01 0.67
experience
Table 2. Descriptive statistics and correlations.
Variable μ σ 1 2 3 4 5
1. Self-employment income 35536 42268
2. Agreeableness 3.53 0.46 –.21**
3. Extraversion 3.23 0.55 .14 .39**
4. Neuroticism 2.20 0.64 –.06 .05 –.12
5. Conscientiousness 3.38 0.43 .03 .34** .19* –.16*
6. Openness to experience 3.03 0.50 .16* .25** .52** .01 .19*
**p<0.01, * p<0.05
environmental factors (AE model). The univariate heritabilities for the measures of personality
characteristics of extraversion, openness to experience, agreeableness, conscientiousness and neu-
roticism were: 0.41 (95% CI 0.32–0.50), 0.44 (95% CI 0.35–0.52), 0.41 (95% CI 0.32–0.50), 0.47
(95% CI 0.39–0.55) and 0.51 (95% CI 0.43–0.58) respectively.
We also found substantial heritability for self-employment income. The best fitting model for
self-employment income included additive genetic and non-shared environmental factors (AE
model), with 74 percent of the variance in self-employment income explained by genetic factors
(p = 0.98; AIC = –7.65; RMSEA = 0.01) (95% CI 0.59–0.84).6,7
We examined the phenotypic correlations between the big five personality characteristics and
self-employment income, which are shown in Table 1. The correlations between self-employment
income and (i) extraversion, (ii) openness to experience (iii) agreeableness, (iv) conscientiousness
and (v) neuroticism were 0.14 (p = 0.086), 0.16 (p = 0.049), –0.21 (p = 0.009), 0.03 (p = 0.692) and
–0.06 (p = 0.455), respectively. Thus, our analysis showed significant relationships between self-
employment income and three of the big five personality characteristics: extraversion, agreeable-
ness and openness to experience.
Basic summary statistics for the MZ and DZ twins are shown in Table 1. We found that there
were no statistical significant differences between monozygotic and dizygotic twins across all of
the measures. Moreover, Levene’s test for equality of variances across MZ and DZ twins yielded
no significant differences. We also examined whether the twins were allocated twin 1 or twin 2
status, such in a way that twin 1’s variance was different from twin 2’s variance. We found no dif-
ferences across the means and variances of twin 1 and twin 2 status across both monozygotic and
dizygotic twins.
Table 3. Results of bivariate genetic analysis.
AE model
Extraversion, self- Openness to experience, Agreeableness, self-

employment income self-employment income employment income
rA 0.15 0.11 –0.38
rC 0 0 0
rE 0.14 0.25 0.00
Percent of phenotypic r 59 39 100
attributable to genetic
influence
Note: rA, rC, and rE represent the genetic, shared environmental and non-shared environmental correlations respectively.
For the big five personality characteristics of agreeableness, openness to experience and extra-
version, we fitted bivariate genetic models to the data (Kuntsi et al., 2004; Singer et al., 2006). The
bivariate genetic analysis between the measure of openness to experience and self-employment
income yielded a genetic correlation (rA) of 0.11 (see Table 3). This indicates that the 39 percent of
the phenotypic correlation between the measure of openness to experience and self employment
income is accounted for by genetic influences [(0.11x√0.74x√0.44)/0.16≈0.39].8 Similarly, the
bivariate genetic analysis between the measure of agreeableness and self-employment income
yielded a genetic correlation (rA) of -0.38. This indicates that 100 percent of the phenotypic correla-
tion between the measure of agreeableness and self-employment income is accounted for by
genetic influences [(–0.38x√0.74x√0.41)/–0.21≈1.00].
The bivariate genetic analysis between the measure of extraversion and self-employment
income yielded a genetic correlation (rA) of 0.15. This indicates that 59 percent of the phenotypic
correlation between the measure of extraversion and self-employment income is accounted for by
genetic influences. However, due to the very small sample size, the 95 percent confidence intervals
for the three genetic correlations (rA) include 1.00 and/or –1.00.
The percentage of phenotypic correlation attributable to genetic influence is different from the
amount of variance explained in a multivariate model. Whether the effect we found is substantive
depends on the point of comparison. On the one hand, industry and founder human capital, for
example, tend to have larger reported effects on entrepreneurial income than genetic effects on
personality. On the other hand, gene–environment correlations mean that some portion of the
effects of industry and founder human capital themselves are genetic, making it impossible to
compare the size of genetic effects on entrepreneurial performance through personality with the
size of environmental effects on entrepreneurial performance through human capital or industry
selected.
Often, the literature on entrepreneurial performance is affected by the ‘compared to what’ prob-
lem (Sorensen and Chang, 2006). Because researchers typically examine only entrepreneurs, it is
difficult to know whether the factors associated with higher performance among entrepreneurs are
performance-enhancing in general, or only in the case of entrepreneurship. In order to disentangle
whether the common genetic factors that we observed between the personality characteristics of
agreeableness and openness to experience and self-employment income are general to all income
or are specific to income from self-employment, we also examined the heritability of salaried
employment income and the genetic correlations between the big five personality characteristics
and salaried employment income (here we examined 518 twins on whom we have wage employ-
ment income data).
We found that the best fitting model for wage–employment income included additive genetic
and non-shared environmental factors (AE model), with 67 percent of the variance in salaried
employment income explained by genetic factors (p = 0.85; AIC = –6.61; RMSEA = 0.01) (95%
CI 0.58-0.74). We examined the phenotypic correlations between salaried employment income and
(i) extraversion, (ii) openness to experience (iii) agreeableness, (iv) conscientiousness and (v) neu-
roticism, and found these to be 0.03, 0.15 (p<0.01), –0.18 (p<0.01), 0.16 (p<0.01) and –0.14
(p<0.05), respectively.
For the big five personality characteristics of openness to experience, agreeableness, consci-
entiousness and neuroticism that were correlated with salaried employment income, we fitted
bivariate genetic models to the data (Kuntsi et al., 2004; Singer et al., 2006). We found that 85
percent of the phenotypic correlation between the measure of neuroticism and salaried employ-
ment income is accounted for by genetic influences, and that 94 percent of the phenotypic cor-
relation between the measure of agreeableness and salaried employment income is accounted for
by genetic influences. Similarly, genetic influences account for 100 percent of the phenotypic
correlation between the measure of openness to experience and salaried employment income,
and 79 percent of the correlation between the measure of conscientiousness and salaried employ-
ment income. Thus, we found that common genetic factors were responsible for both the personal-
ity characteristics of openness to experience and lack of agreeableness and income among both the
salaried and the self-employed. Common genetic factors were responsible for both the personality
traits of extraversion, emotional stability and conscientiousness and salaried employment income.
Discussion
In this study, we applied bivariate genetics techniques to a sample of 148 identical and fraternal
twins to examine the heritability of entrepreneurial performance. We developed a theoretical argu-
ment for how genetic factors might influence entrepreneurial performance based on person–job fit,
and looked at whether the same genetic factors that influenced the development of the big five
personality characteristics also affected entrepreneurial performance. We found only partial sup-
port for this argument. Although the analysis revealed that self-employment income and the big
five personality characteristics are heritable, we observed significant phenotypic correlations
between measures of only three of the big five personality characteristics (agreeableness, openness
to experience and extraversion) and self-employment income.
We found common genetic influences for those personality characteristics which had sig-
nificant phenotypic correlations with self-employment income. However, the confidence
intervals were high and included 1.00 and/or -1.00 due to the small sample size. Nevertheless,
we found that genetic factors accounted for 59 percent of the phenotypic correlation between
the measure of extraversion and self-employment income, 39 percent of the phenotypic cor-
relation between the measure of between openness to experience and self-employment income,
and 100 percent of the phenotypic correlation between the measure of agreeableness and self-
employment income.
Although these results are imprecise due to the small sample size, and are limited by the lack
of phenotypic correlations between several of the big five personality characteristics and entre-
preneurial activity, they are broadly consistent with Shane et al (2010b)’s finding of genetic
co-variation between personality characteristics and the tendency to be an entrepreneur. That
study found evidence of a common genetic effect on the tendency to be an entrepreneur and
extraversion and openness to experience. We found evidence of a common genetic effect on

self-employment income and extraversion and openness to experience (we also found evidence
of a common genetic effect on self-employment income and agreeableness not present in Shane
et al., 2010b).
The effect sizes found in the present study are consistent with those of previous studies of the
effect of the big five personality characteristics on entrepreneurial performance. We found that the
correlations between self-employment income and extraversion, openness to experience and agree-
ableness were 0.14, 0.16 and -0.21 respectively. By comparison, in a meta analysis, Zhao et al.
(2010) found effect sizes for the correlation with ‘entrepreneurial performance’ of 0.15 for consci-
entiousness, 0.15 for openness to experience, 0.14 for emotional stability, 0.08 for extraversion and
0.04 for agreeableness. As Zhao et al. explain: ‘The estimated effect size for the Big Five con-
structs as a set is moderate in magnitude, explaining … 10% of the variance in entrepreneurial
performance’ (2010: 15). Moreover, Zhao et al.’s (2010) measure of entrepreneurial performance
included both key informant ratings and financial outcomes. Because the effect sizes were larger
for the key informant ratings than for financial outcomes, their effect sizes should have been larger
than ours.
We also found that the same common genetic factors were responsible for personality charac-
teristics of openness to experience and income among both the salaried and self-employed.
However, for extraversion and income, the common genetic factor was present only for those
who were self-employed; while for income and emotional stability and conscientiousness, the
common genetic factors were present only for salaried employment income. These patterns sug-
gest that the innate tendencies to develop personality characteristics that provide a person with
the job fit that enhances income are not the same for both the salaried and self-employed. That
is, there is a genetic basis to personality–job fit that is not identical for the salaried and
self-employed.
Limitations of the study

This study has several limitations that might account for the partial evidence found for common
genetic effects between the big five aspects of personality and self-employment income. No evi-
dence was found for the relationship between conscientiousness and self-employment income,
which was shown in Zhao et al.’s (2010) meta-analysis. Therefore, it is possible that the single-
study design was insufficient to capture this effect.
However, the results suggest that measurement error does not account for the limited support for
our hypotheses. Because evidence was found of the heritability of measures of the big five person-
ality characteristics, it appears unlikely that the results are artifacts of the sample or the instrument
used to measure the personality characteristics. Furthermore, the fact that evidence was found of
phenotypic correlations between measures of three of the big five aspects of personality and self
employment income, while Zhao et al. (2010) found evidence for correlations between four of the
big five aspects of personality and entrepreneurial earnings, suggests that inaccurate measurement
of aspects of personality and self-employment income are not the explanation for the limited
genetic co-variation.
A further limitation is the potential for the aspects of personality that were measured to proxy
for unobserved characteristics other than personality. For example, openness to experience tends to
be correlated with intelligence. Therefore, it is possible that the correlation between openness to
experience and self-employment income merely represents an unobserved correlation between
intelligence and performance at entrepreneurship. If this were the case, the common genetic factor
found between openness to experience and the tendency to be an entrepreneur would actually rep-
resent a common genetic factor between intelligence and self-employment income. Because we
lack data on the intelligence of the respondents, we cannot rule out this alternative explanation. As
a result, readers should keep in mind the potential for unobserved factors correlated with the per-
sonality characteristics as possibly being the mediating variables between genetics and perfor-
mance at entrepreneurial activity.
Further, our evidence of the genetic correlations between personality characteristics and
self-employment income tells us little about the causal chain from genes to income. While we
know that genes are the beginning of the causal chain and income is the end and that personal-
ity lies somewhere in the middle, we provide no information on how genes affect personality,
or how personality affects behavior in ways that influence income. Future research is needed
to identify more completely the causal chain through which genes affect self-employment
income.
An additional limitation is the reliability for conscientiousness. This was only 0.58, well below
the recommended 0.70. Consequently, the results for conscientiousness here should be interpreted
with caution. A further limitation of the study is the small sample size. Twin study designs require
investigation of pairs of twins, but twins make up only about 3.6 percent of the US population.
Performance at self-employment can be examined only in samples of the self-employed, but only
about 11 percent of the US population is self-employed at any one point in time (US Bureau of
Labor Statistics, 2011). Therefore, despite efforts of MIDUS researchers to screen a nationally
representative sample of 50,000 people for the presence of a twin, our analysis of performance at
self-employment was limited to 148 self-employed twins, which greatly limited the precision of
the estimates. As a result, the findings of this study are tentative, and additional studies with much
greater samples are required to corroborate the evidence presented here.
Another potential limitation of the study is that reported self-employment income in surveys
may be a poor measure of actual returns to self-employment, because entrepreneurs tend to under-
report income. However, for measurement error in the reported self-employment income to bias
the results, identical twins must be more likely than fraternal twins to under-report or over-report
income. We cannot think of any reason why this would be the case, and are not aware of any evi-
dence to support this assertion.
Implications for entrepreneurship research

The results of this study have important implications for research. For research on entrepreneur-
ship, they show the importance of formulating theories of entrepreneurial performance that accom-
modate a genetic effect. The findings show that the genetic component to self-employment income
is not trivial. Researchers could build this information into theories designed to explain the perfor-
mance of entrepreneurs, and aim to uncover how interactions between genes, institutions and the
environment ultimately shape entrepreneurial behavior.
The results also have implications for theories of occupational choice based on person–job fit.
The findings build on the work of researchers who have argued that people often choose their jobs
to fit their personalities, and that job performance reflects the fit or lack of fit of personality to job
characteristics (Kristof, 1996). Because personality characteristics are in part innate, this means
that some portion of person–job fit reflects efforts of people to fit their jobs to their genetic
endowments.
Moreover, the results of this study may help future researchers to identify specific genes that
affect performance at entrepreneurship. Because it was found that common genetic factors
accounted for as much as 100 percent of the covariance between agreeableness and self-employ-
ment income, and previous research has found that the DRD4 and 5-HTTLPR genes are related to
agreeableness (Comings et al., 1999), the present findings suggest that these genes would be good
candidates to test for interactions with environmental and institutional variables, in order to explain
entrepreneurial performance.
The results also provide insight into how genetic factors influence person–job fit. While open-
ness to experience did not predict job performance in meta-analyses of employees, conscientious-
ness, emotional stability and extraversion were all predictors of performance among the salaried
(Barrick et al., 2001; Hurtz and Donovan, 2000). The present study showed that disagreeableness
and openness to experience were strong predictors of performance among the self-employed.
Moreover, this study showed that genetic factors accounted for a large portion of the correlation
between these personality characteristics and self-employment income, and that the genetic cor-
relations between personality characteristics and income were different for the self-employed and
salaried. Taken together, these findings suggest that genetic factors influence person–job fit for
self-employment by affecting the propensity to develop self-employment-favorable personality
characteristics.
Implications for practice

We are reticent to draw strong implications for practice from a study of genetic effects in a single
sample of twins. Research on the genetics of entrepreneurship is at an early stage of development,
and this study’s results have not been replicated and are subject to several limitations, which have
been highlighted above. However, with these caveats in mind, we offer the following implications
for practice. First, the finding that the entire environmental influence on entrepreneurial perfor-
mance is of the non-shared variety may have implications for corporate entrepreneurship. Given
that a significant part of an individual’s non-shared environment comes from their work environ-
ment, the results suggest that companies may affect the likelihood that their employees will engage
in successful corporate venturing or other entrepreneurial activities through the work environments
that they provide.
Second, the patterns identified here are merely predispositions and not deterministic relation-
ships. People can always overcome their genetic predispositions; but at the most basic level, over-
coming predispositions means recognizing that one is acting against one’s natural tendencies.
While such action definitely can be successful, it usually requires more effort and more conscious
action than acting in accord with those tendencies. Thus, knowing how genetically influenced
personality characteristics influence performance at self-employment may help entrepreneurs to
figure out how to be successful running their own businesses, if they are not graced with a genetic
endowment favorable to entrepreneurship-helpful personality characteristics.
Similarly, evidence as to how genetic effects on personality influence performance at entrepre-
neurship might help entrepreneurship educators to understand how best to train entrepreneurs.
Efforts to enhance success at entrepreneurship may be more effective if they are focused on influ-
encing variables whose co-variation with self-employment income is mostly environmental, rather
than variables whose co-variation with entrepreneurship is mostly genetic. The present analysis
has shown that when personality has a significant effect on self-employment income, this co-
variation is largely genetic. This empirical pattern suggests that efforts to train entrepreneurs should
not focus on efforts to adjust their personalities; rather, they should focus on factors less subject to
genetic co-variation with performance at entrepreneurship, such as knowledge of the entrepreneur-
ial process or access to capital. Knowing what variables are not the best to manipulate in efforts to
enhance entrepreneurship through changes to environmental factors helps educators and policy-
makers to enhance the performance of entrepreneurs.
Nevertheless, if one were to try to change personality characteristics as a way to enhance entre-
preneurial performance, such interventions could vary in their effectiveness, depending on the
personality characteristic on which one focuses. This study identified three personality character-
istics which have a substantive effect on self-employment income: openness to experience, agree-
ableness and extraversion. However, it was found that environmental factors accounted for more
of the co-variance between openness to experience and entrepreneurial performance, than between
agreeableness and entrepreneurial performance. This result indicates that the variation in agree-
ableness across people that affects their entrepreneurial performance depends significantly more
on genetic factors than the variance in openness to experience, suggesting that openness to experi-
ence is a better candidate for efforts to change people’s personalities as a way to increase their
performance at entrepreneurship.
Acknowledgements
We are grateful to Susan Marlow and the anonymous reviewers for their constructive and helpful comments.
We also would like to thank David Hsu, Diane Burton and Michael Frese.
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit
sectors.
Notes
1. It is important to emphasize that we are not arguing that genetic factors determine who engages in entre-
preneurial activity. Genetic factors on entrepreneurship are merely probabilistic propensities, and only
increase the likelihood that some people will become entrepreneurs. They should not be confounded
with biological determinism (Nicolaou and Shane, 2011).
2. Identical, or monozygotic twins are formed when a single sperm fertilizes a single egg to form a zygote,
which then divides into two separate embryos. Fraternal, or dizygotic twins are formed when two sepa-
rate sperms fertilize two separate eggs, forming two zygotes. Identical twins share all of their genes,
while fraternal twins share on average half of their segregating genes.
3. Zhao et al.’s (2010) meta-analysis includes not only papers that used the big five personality character-
istics, but also papers that used other personality dimensions that were recoded into the big five for the
purposes of the meta-analysis.
4. We do not argue that there is irrefutable evidence of associations between specific genes and person-
ality characteristics. The genetics literature is full of associations that have not withstood the test of
replication (Hewitt, 2012). In particular, recent genome-wide association studies have not provided
support for many of the earlier associations from candidate gene studies. In addition, some candidate
gene studies have not found significant associations between specific genes and personality charac-
teristics, just as some non-genetic studies have not found significant associations between human
capital, gender, occupation and other human characteristics and personality. For both genetic and
non-genetic studies, the insignificant findings could result from measurement error or lack of support
for the theory behind the proposed association. The inability to differentiate the two sources of null
findings has led management and entrepreneurship researchers to develop the norm of citing only
significant results when developing the arguments to justify theoretical propositions to be tested. We
have adopted this convention here to be consistent with the approach taken in the literature. Just as
we would cite only those articles that have found a significant association between education and a
personality characteristic to justify a hypothesis that the two would be correlated, we cite only those
articles that have found a significant association between a specific gene and a personality character-
istic to justify a hypothesis that the two would be correlated.
5. A phenotype is any observed characteristic of an individual.
6. The results for the AE model were 0.54 (95% CI: 0.02–0.83) for additive genetic (A) factors, 0.20 (95%
CI: 0.00–0.66) for common environmental (C) factors, and 0.26 (95% CI: 0.16–0.42) for unique envi-
ronmental (E) factors (Akaike’s Information Criterion = -6.00). The results for the CE model were 0.65
(95% CI: 0.49–0.77) for common environmental (C) factors, and 0.35 (95% CI: 0.23–0.51) for unique
environmental (E) factors (AIC = -3.85).
7. To avoid any problems that may be caused by non-random assignment of twin 1 or twin 2 status
(for example, if the firstborn is always coded as twin 1) (Plomin et al., 2008), we also double-
entered the twins so that each individual was entered twice in the data. We found a similar heritabil-
ity estimate for self-employment income for the double-entered analysis as we did for the regular
analysis.
8. Multiplying the genetic correlation by the square root of the heritability estimate for openness to experi-
ence, and the square root of the heritability estimate for entrepreneurial performance, provides the cor-
relation between openness to experience and entrepreneurial performance that is accounted for by
genetic factors.
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Author biographies
Nicos Nicolaou is at the Department of Business and Public Administration, University of Cyprus and a
Professor of Entrepreneurship at Cass Business School, City University London. He was previously on the
faculty at Imperial College Business School, Imperial College London and has held visiting positions at the
University of Cambridge and at Imperial College London. He has published in journals like Management
Science, Journal of Applied Psychology, Organizational Behavior and Human Decision Processes, Journal
of Business Venturing, Research Policy, Human Resource Management, Journal of Economic Behavior and
Organization, Strategic Entrepreneurship Journal and others.
Scott Shane is the A. Malachi Mixon III Professor of Entrepreneurial Studies at the Weatherhead School of
Management, Case Western Reserve University. Before moving to Case Western, he held faculty appoint-
ments at MIT, the University of Maryland and Georgia Tech. Professor Shane is the 2009 winner of the
Global Award for Entrepreneurship Research and the 2010 winner of the AMR Decade Award. He has pub-
lished in journals like Management Science, Academy of Management Review, Academy of Management
Journal, Organization Science, Journal of Applied Psychology and others.

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The genetics of entrepreneurial 31(5) 473­–495

Future Directions in Entrepreneurship Research Series

That a genetic predisposition to develop an entrepreneurship-favorable personality affects per-

2006). Moreover, successful entrepreneurial performance is enhanced by information monitoring

Quantitative genetic techniques

Φiξ = aAiξ + cCiξ + eEiξ and VΦ = a2+ c2+ e2 = 1

Twin 1 Twin 1 Twin 2 Twin 2

Figure 1. Path diagram for bivariate genetic analysis.

Equal environments assumption

Twin 1 Twin 2 Twin 1 Twin 2

Figure 2. Variance covariance matrix for the MZ twins.

Twin 1 Twin 2 Twin 1 Twin 2

Figure 3. Variance covariance matrix for the DZ twins.

Table 1. Summary statistics for MZ and DZ twins.

Table 2. Descriptive statistics and correlations.

Table 3. Results of bivariate genetic analysis.

Extraversion, self- Openness to experience, Agreeableness, self-

extraversion and openness to experience. We found evidence of a common genetic effect on

Limitations of the study

Implications for entrepreneurship research

Implications for practice

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The genetics of entrepreneurial 31(5) 473–495