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Explaining engagement levels of opportunity and necessity entrepreneurs

Author

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  • 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.

Suggested Citation

  • Roy Thurik & Ingrid Verheul & Isabel Grilo & Reena Bhola, 2006. "Explaining engagement levels of opportunity and necessity entrepreneurs," Scales Research Reports H200610, EIM Business and Policy Research.
  • Handle: RePEc:eim:papers:h200610
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    References listed on IDEAS

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    1. André Stel & Martin Carree & Roy Thurik, 2005. "The Effect of Entrepreneurial Activity on National Economic Growth," Small Business Economics, Springer, pages 311-321.
    2. Juan C. Botero & Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "The Regulation of Labor," The Quarterly Journal of Economics, Oxford University Press, pages 1339-1382.
    3. Ingrid Verheul & Sander Wennekers & David Audretsch & Roy Thurik, 2001. "An Eclectic Theory of Entrepreneurship: Policies, Institutions and Culture," Tinbergen Institute Discussion Papers 01-030/3, Tinbergen Institute.
    4. Ingrid Verheul & André Van Stel & Roy Thurik, 2006. "Explaining female and male entrepreneurship at the country level," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 18(2), pages 151-183, March.
    5. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    6. Joan-Lluis Capelleras & Kevin F Mole & Francis J Greene & David J Storey, 2008. "Do more heavily regulated economies have poorer performing new ventures? Evidence from Britain and Spain," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 688-704, June.
    7. John Armour & Douglas Cumming, 2008. "Bankruptcy Law and Entrepreneurship," American Law and Economics Review, Oxford University Press, vol. 10(2), pages 303-350.
    8. repec:hrv:faseco:30747190 is not listed on IDEAS
    9. Sander Wennekers & André Stel & Roy Thurik & Paul Reynolds, 2008. "Nascent entrepreneurship and the level of economic development," Small Business Economics, Springer, vol. 30(3), pages 325-325, March.
    10. Roy Thurik & Isabel Grilo, 2006. "Entrepreneurship in the old en new Europe," Scales Research Reports N200516, EIM Business and Policy Research.
    11. Isabel Grilo & Jesus-Maria Irigoyen, 2006. "Entrepreneurship in the EU: To Wish and not to be," Small Business Economics, Springer, vol. 26(4), pages 305-318, May.
    12. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, pages 3-22.
    13. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
    14. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
    15. Roy Thurik & Isabel Grilo, 2005. "Latent and actual entrepreneurship in Europe and the US: some recent developments," Papers on Entrepreneurship, Growth and Public Policy 2005-24, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    16. David B. Audretsch & Isabel Grilo & A. Roy Thurik, 2007. "Explaining Entrepreneurship and the Role of Policy: A Framework," Chapters,in: Handbook of Research on Entrepreneurship Policy, chapter 1 Edward Elgar Publishing.
    17. Rolf Sternberg & Sander Wennekers, 2005. "Determinants and Effects of New Business Creation Using Global Entrepreneurship Monitor Data," Small Business Economics, Springer, vol. 24(3), pages 193-203, January.
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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. 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.
    4. 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.
    5. Mahnoor Asif & Anum Ellahi, 2016. "Correlates of Entrepreneurship in Pakistan: The Regional Dimension," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 193-210, September.

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