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

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Author Info
Block, Joern
Sandner, Philipp

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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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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

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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  1. Joachim Wagner, 2005. "Nascent Necessity and Opportunity Entrepreneurs in Germany. Evidence from the Regional Entrepreneurship Monitor (REM)," Labor and Demography 0506004, EconWPA. [Downloadable!]
  2. van Praag, C Mirjam, 2003. " Business Survival and Success of Young Small Business Owners," Small Business Economics, Springer, vol. 21(1), pages 1-17, August. [Downloadable!] (restricted)
    Other versions:
  3. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May. [Downloadable!]
  4. Wagner, Joachim & Sternberg, Rolf, 2002. "Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the REM Germany," IZA Discussion Papers 624, Institute for the Study of Labor (IZA). [Downloadable!]
  5. 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. [Downloadable!] (restricted)
  6. Block, Joern & Wagner, Marcus, 2006. "Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials," MPRA Paper 610, University Library of Munich, Germany. [Downloadable!]
  7. Lazear, Edward P., 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Michael Fritsch & Oliver Falck & Udo Brixy, 2004. "The Effect of Industry, Region and Time on New Business Survival - A Multi-Dimensional Analysis," Discussion Papers on Entrepreneurship, Growth and Public Policy 2004-31, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
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  9. Strauch, Rolf & von Hagen, Jürgen, 2000. "East Germany: Transition With Unification - Experiments and Experiences," CEPR Discussion Papers 2386, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  10. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S227-52, October. [Downloadable!] (restricted)
  11. Schiller, Bradley R & Crewson, Philip E, 1997. "Entrepreneurial Origins: A Longitudinal Inquiry," Economic Inquiry, Oxford University Press, vol. 35(3), pages 523-31, July.
  12. Zoltán Ács & Attila Varga, 2005. "Entrepreneurship, Agglomeration and Technological Change," Small Business Economics, Springer, vol. 24(3), pages 323-334, 02. [Downloadable!] (restricted)
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  13. 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.
  14. 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. [Downloadable!] (restricted)
  15. 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). [Downloadable!]
    Other versions:
  16. 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. [Downloadable!] (restricted)
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