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Necessity and Opportunity Entrepreneurs and Their Duration in Self-employment: Evidence from German Micro Data

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  • Jörn Block
  • Philipp Sandner

Abstract

Using data from the German Socio-Economic Panel Study (GSOEP), we analyze whether necessity entrepreneurs differ from opportunity entrepreneurs in terms of self-employment duration. Using univariate statistics, we find that opportunity entrepreneurs remain in self-employment longer than necessity entrepreneurs. However, after controlling for the entrepreneurs' education in the professional area where they start their venture, this effect is no longer significant. We therefore conclude that the difference observed is not an original effect but rather is due to selection. We then go on to discuss the implications of our findings for entrepreneurship-policy making, and give suggestions to improve governmental start-up programs.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 191.

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Length: 34 p.
Date of creation: 2009
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp191

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Keywords: Self-employment; Firm survival; Necessity entrepreneurs; Opportunity entrepreneurs; Hazard rates; GSOEP;

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References

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Citations

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Cited by:
  1. Sandner, Philipp G. & Block, Jörn H. & Lutz, Andreas, 2008. "Determinanten des Erfolgs staatlich geförderter Existenzgründungen – eine empirische Untersuchung," Discussion Papers in Business Administration, University of Munich, Munich School of Management 2968, University of Munich, Munich School of Management.
  2. Vera Rocha & Anabela Carneiro & Celeste Amorim Varum, 2013. "Entrepreneurship Dynamics: Entry Routes, Business-Owner's Persistence and Exit Modes," CEF.UP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 1310, Universidade do Porto, Faculdade de Economia do Porto.
  3. Block, J.H. & Thurik, A.R. & Zhou, H., 2009. "What Turns Knowledge into Innovative Products? The Role of Entrepreneurship and Knowledge Spillovers," ERIM Report Series Research in Management, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasm ERS-2009-049-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  4. Giacomin, Olivier & Janssen, Frank & Guyot, Jean-luc & Lohest, Olivier, 2011. "Opportunity and/or necessity entrepreneurship? The impact of the socio-economic characteristics of entrepreneurs," MPRA Paper 29506, University Library of Munich, Germany.
  5. Syed Awais Ahmad Tipu, 2012. "What have we learned? Themes from the literature on necessity driven entrepreneurship," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, Inderscience Enterprises Ltd, vol. 8(1), pages 70-91.
  6. Juergen Bruenjes & Javier Revilla Diez, 2012. "Opportunity entrepreneurs - potential drivers of non-farm growth in rural Vietnam?," Working Papers on Innovation and Space 2012-01, Philipps University Marburg, Department of Geography.
  7. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, Elsevier, vol. 36(1), pages 83-106.
  8. Romero, Isidoro & Martínez-Román, Juan A., 2012. "Self-employment and innovation. Exploring the determinants of innovative behavior in small businesses," Research Policy, Elsevier, Elsevier, vol. 41(1), pages 178-189.
  9. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
  10. Block, Joern & Sandner, Philipp & Spiegel, Frank, 2009. "Do risk attitudes differ within the group of entrepreneurs?," MPRA Paper 17587, University Library of Munich, Germany.
  11. André van Stel & José Maria Millán & Concepcion Roman, 2013. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Scales Research Reports, EIM Business and Policy Research H201208, EIM Business and Policy Research.
  12. André van Stel & Werner Liebregts & Nardo de Vries, 2013. "Explaining entrepreneurial performance of solo self-employed from a motivational perspective," Scales Research Reports, EIM Business and Policy Research H201308, EIM Business and Policy Research.
  13. Block, Jörn & Kohn, Karsten & Miller, Danny & Ullrich, Katrin, 2014. "Necessity Entrepreneurship and Competitive Strategy," IZA Discussion Papers 8219, Institute for the Study of Labor (IZA).
  14. Jolanda Hessels & Peter van der Zwan, 2013. "Start-up motivation and (in)voluntary exit," Scales Research Reports, EIM Business and Policy Research H201309, EIM Business and Policy Research.
  15. Schneck, Stefan & May-Strobl, Eva, 2014. "The economic contribution of start-up firms in Germany," Working Papers, Institut für Mittelstandsforschung (IfM) Bonn 02/14, Institut für Mittelstandsforschung (IfM) Bonn.
  16. Block, Joern & Kohn, Karsten, 2011. "Sozialpolitische Ziele der Gründungsförderung am Beispiel von Gründungen aus der Arbeitslosigkeit
    [Social policy as a motivation for start-up subsidies: supporting start-ups out of unemployment]
    ," MPRA Paper 30775, University Library of Munich, Germany.
  17. Gohmann, Stephan F. & Fernandez, Jose M., 2014. "Proprietorship and unemployment in the United States," Journal of Business Venturing, Elsevier, vol. 29(2), pages 289-309.
  18. José Millán & Emilio Congregado & Concepción Román, 2012. "Determinants of self-employment survival in Europe," Small Business Economics, Springer, Springer, vol. 38(2), pages 231-258, February.
  19. Dirk Oberschachtsiek, 2012. "The experience of the founder and self-employment duration: a comparative advantage approach," Small Business Economics, Springer, Springer, vol. 39(1), pages 1-17, July.
  20. repec:dgr:uvatin:2011066 is not listed on IDEAS

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