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Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials

Schmalenbach Business Review, Vol. 62, pp. 154-174, April 2010

21 Pages Posted: 11 May 2010  

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Marcus Wagner

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 2010

Abstract

In this paper we discuss necessity and opportunity entrepreneurship. We use panel data to analyze how these two types of entrepreneurs differ in general, and in their ability to discover and exploit entrepreneurial opportunities. We find that the opportunities exploited by opportunity entrepreneurs are generally more profitable than are those exploited by necessity entrepreneurs. We also find that the determinants of success differ to a strong degree. Standard wage equations seem to work better for opportunity than for necessity entrepreneurs. Our findings indicate a need to distinguish between the two groups in entrepreneurship theory and practice.

Keywords: Earnings Equation, Necessity Entrepreneurship, Opportunity Discovery, Opportunity Entrepreneurship, Opportunity Exploitation

JEL Classification: C23, J23, J24, J31, M13

Suggested Citation

Block, Jorn H. and Wagner, Marcus, Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials (April 1, 2010). Schmalenbach Business Review, Vol. 62, pp. 154-174, April 2010. Available at SSRN: https://ssrn.com/abstract=1604117

Jorn Hendrich Block (Contact Author)

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Marcus Wagner

affiliation not provided to SSRN ( email )

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