Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials
AbstractOur paper uses data from the German Socio Economic Panel Study (GSOEP) to analyze how necessity and opportunity entrepreneurs differ in kind and in earnings and what the determinants of the latter are. We estimate probit and random effects panel data models in order to address these questions. We find that the two types of entrepreneurs differ as concerns age, gender and other characteristics, but not with regard to education levels. Furthermore, opportunity entrepreneurs earn significantly more in our sample and the determinants of earnings levels differ to some degree. We conclude that our findings indicate a need to distinguish between the two groups in entrepreneurship policy-making. The results also show that commonly used specifications of earnings equations in labour economics seem to work better for opportunity than for necessity entrepreneurs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 610.
Date of creation: 01 Apr 2006
Date of revision:
opportunity entrepreneurship; necessity entrepreneurship; earnings equation; wage equation; entrepreneurship; Germany; GSOEP;
Other versions of this item:
- 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.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-BEC-2006-11-12 (Business Economics)
- NEP-ENT-2006-11-12 (Entrepreneurship)
- NEP-LAB-2006-11-12 (Labour Economics)
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