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Necessity and Opportunity Entrepreneurs and their Duration in Self-employment: Evidence from German Micro Data

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  • Block, Jörn H.
  • Sandner, Philipp G.

Abstract

Using data from the German Socio-Economic Panel Study (GSOEP), we analyze whether necessity entrepreneurs differ from opportunity entrepreneurs in terms of self-employment duration. Using univariate statistics, we find that opportunity entrepreneurs remain in self-employment longer than necessity entrepreneurs. However, after controlling for the entrepreneurs’ education in the professional area where they start their venture, this effect is no longer significant. We therefore conclude that the difference observed is not an original effect but rather is due to selection. We then go on to discuss the implications of our findings for entrepreneurship-policy making, and give suggestions to improve governmental start-up programs.

Suggested Citation

  • Block, Jörn H. & Sandner, Philipp G., 2007. "Necessity and Opportunity Entrepreneurs and their Duration in Self-employment: Evidence from German Micro Data," Discussion Papers in Business Administration 2082, University of Munich, Munich School of Management.
  • Handle: RePEc:lmu:msmdpa:2082
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    References listed on IDEAS

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    More about this item

    Keywords

    Self-employment; Firm survival; Necessity entrepreneurs; Opportunity entrepre-neurs; Hazard rates; GSOEP;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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