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The Effect of Motivation on Self-Employment Duration in Germany: Necessity versus Opportunity Entrepreneurs

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  • Block, Joern
  • Sandner, Philipp

Abstract

Using data from the German Socio-Economic Panel Study (GSOEP), we analyze whether necessity and opportunity entrepreneurs differ in terms of self-employment duration. We find that the two types of entrepreneurs differ regarding their duration in self-employment. Once controlled for educational variables however, this effect turns out to be no longer significant. We therefore conclude that the difference observed is no original effect but is due to selection. We then go on to discuss the implications of our finding for entrepreneurship-policy making. Suggestions to improve governmental start-up support programmes are given. Estimations are carried out with discrete time hazard rate models controlling for unobserved heterogeneity.

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File URL: http://mpra.ub.uni-muenchen.de/215/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 215.

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Date of creation: 04 Oct 2006
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Handle: RePEc:pra:mprapa:215

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Related research

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

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References

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  1. von Hagen, Jürgen & Strauch, Rolf R. & Wolff, Guntram B., 2002. "East Germany: Transition with Unification ; Experiments and Experiences," ZEI Working Papers B 19-2002, ZEI - Center for European Integration Studies, University of Bonn.
  2. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, October.
  3. Joern H. Block & Marcus Wagner, 2010. "Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earning s Differentials," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 62(2), pages 154-174, April.
  4. Zoltán Ács & Attila Varga, 2005. "Entrepreneurship, Agglomeration and Technological Change," Small Business Economics, Springer, vol. 24(3), pages 323-334, 02.
  5. Bruno Frey & Matthias Benz, 2003. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," CESifo Working Paper Series 959, CESifo Group Munich.
  6. Schiller, Bradley R & Crewson, Philip E, 1997. "Entrepreneurial Origins: A Longitudinal Inquiry," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 523-31, July.
  7. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  8. Pfeiffer, Friedhelm & Reize, Frank, 2000. "Business start-ups by the unemployed -- an econometric analysis based on firm data," Labour Economics, Elsevier, vol. 7(5), pages 629-663, September.
  9. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
  10. Wagner, Joachim, 2002. "Testing Lazear’s Jack-of-All-Trades View of Entrepreneurship with German Micro Data," IZA Discussion Papers 592, Institute for the Study of Labor (IZA).
  11. Brixy, Udo & Falck, Oliver & Fritsch, Michael, 2006. "The effect of industry, region, and time on new business survival - A multi-dimensional analysis," Munich Reprints in Economics 20195, University of Munich, Department of Economics.
  12. Joachim Wagner, 2005. "Nascent Necessity and Opportunity Entrepreneurs in Germany. Evidence from the Regional Entrepreneurship Monitor (REM)," Labor and Demography 0506004, EconWPA.
  13. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S227-52, October.
  14. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  15. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
  16. repec:iza:izadps:dp624 is not listed on IDEAS
  17. Lazear, Edward, 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA).
  18. Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
  19. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
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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.

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