Risk attitudes have an impact on not only the decision to become an entrepreneur but also the survival and failure rates of entrepreneurs. Whereas recent research underpins the theoretical proposition of a positive correlation between risk attitudes and the decision to become an entrepreneur, the effects on survival are not as straightforward. Psychological research posits an inverse U-shaped relationship between risk attitudes and entrepreneurial survival. On the basis of recent waves of the German Socio-Economic Panel (SOEP), we examine the extent to which risk attitudes influence survival rates of entrepreneurs. The empirical results confirm that persons whose risk attitudes are in the medium range survive significantly longer as entrepreneurs than do persons with particularly low or high risks.

The impact of risk attitudes on entrepreneurial survival

Understanding rural livelihood strategies and environmental resource dependence can help to reduce and prevent livelihood stresses induced by environmental resource degradation. This study identifies livelihood strategies of farm households in rural Cambodia and explores their determinants with a focus on environmental resource dependence. The data are derived from a survey of 580 households in 30 villages of Stung Treng province in Cambodia undertaken in 2013. An activity-based two-step cluster analysis is conducted to identify different livelihood clusters and regression models are performed to determine the major factors affecting the choice of livelihood strategies and the dependence on environmental resources. The results demonstrate how different levels of environmental and household capital influence livelihood strategies. Environmental resources contribute a significant portion of household income (27%) and act as a means to reduce income inequality (7%) among households. The absolute environmental income is positively correlated with the total income but the relative environmental income decreases with an increase in total income. Thus, it appears that low income households are not to be blamed for environmental degradation, because they are unable to undertake activities with high return. The findings of this study suggest that promoting off-farm employment, education and social networking reduces the extraction of environmental resources.

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Rural Livelihoods and Environmental Resource Dependence in Cambodia

Rural livelihoods and environmental resource dependence in Cambodia

Determinants of Farmers’ Land Use Decision-Making: Comparative Evidence From Thailand and Vietnam

A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants' location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants' past geographic distribution. We present evidence that estimates based on this "shift-share" instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a "multiple instrumentation" procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.

Shift-Share Instruments and the Impact of Immigration

The overall objective of this discussion paper is to advance the knowledge on rural livelihoods in Stung Treng, Cambodia. In a cluster analysis, five clusters with very different livelihood strategies are identified based on a sample of 600 rural households. Despite the fact that nearly all households are engaged in some form of subsistence farming, especially by growing rice, the richer clusters build on self-employment and higher-skilled wage employment. In contrast the middle income cluster mainly depends on natural resources (fish and firewood). The poorer two clusters are engaged in lower-skilled wage employment. The incidence of poverty is widespread but differences between the clusters are clearly visible. Even the better-off households have consumption poverty headcount ratios of between 37 to 50% at PPP $1.25. For households from the poorest clusters the poverty headcount ratio amounts to even 70% for income and 80% for consumption. Especially the households largely depending on natural resource extraction are characterized by a high incidence of poverty and high vulnerability. In addition, there are a number of pressures which are expected to increase poverty problems in the future. Policies aimed at reducing poverty and improving rural livelihoods need to carefully consider the close linkages between rural livelihoods and natural resources. But also a diversification away from natural resource extraction into higher-skilled jobs is found to be a strategy opening up new opportunities to improve livelihood security and raise the living standards of the poor.

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Dorothee Bühler

Papers

Rural livelihoods and environmental resource dependence in Cambodia

Rural livelihood strategies in Cambodia: Evidence from a household survey in Stung Treng

Eat Your Fish and Sell It, Too – Livelihood Choices of Small-Scale Fishers in Rural Cambodia

Matching food security and malnutrition indicators: evidence from Southeast Asia

Occupational Attainment and Earnings in Southeast Asia: The Role of Non-cognitive Skills