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Explaining engagement levels of opportunity and necessity entrepreneurs

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Author Info

  • Roy Thurik
  • Ingrid Verheul
  • Isabel Grilo
  • Reena Bhola

Abstract

This paper investigates differences between opportunity and necessity entrepreneurs in terms of socio-demographics, attitudes and perception of 'obstacles'. We use the 2004 Flash Eurobarometer Survey data. Explanatory variables include gender, age, education level and self-employed parents, risk tolerance, locus of control, perceptions of four 'obstacles' and country effects. The 'obstacle' variables include the perception of availibility of financial support; administrative complexity; of access to information on new venture creation and an unfavorable economic climate. Using probit equations we investigate differences in the preference for self-employment of opportunity and necessity entrepreneurs. A probit equation is estimated relating the explanatory variables to opportunity versus necessity entrepreneurship. Moreover, differences in the entrepreneurial engagement of opportunity and necessity entrepreneurs are investigated on the basis of a (ordered) multinomial logit model. Findings indicate that opportunity entrepreneurs have a higher preference for self-employment because of family encouragement. Also, opportunity entrepreneurs are found to perceive of administrative complexity and an unfavorable economic climate, negatively influencing their entrepreneurial involvement, while this is not the case for necessity entrepreneurs.

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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200610.

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Length: 46 pages
Date of creation: 25 Sep 2006
Date of revision:
Handle: RePEc:eim:papers:h200610

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Cited by:
  1. 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.
  2. Jolanda Hessels & Marco Gelderen & Roy Thurik, 2008. "Entrepreneurial aspirations, motivations, and their drivers," Small Business Economics, Springer, vol. 31(3), pages 323-339, October.
  3. Ingrid Verheul & Linda van Mil, 2008. "What Determines the Growth Ambition of Dutch Early-Stage Entrepreneurs?," Scales Research Reports H200811, EIM Business and Policy Research.
  4. 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.

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