Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials

Schmalenbach Business Review, Vol. 62, No. 4, pp. 154-174, 2010

27 Pages Posted: 8 May 2006 Last revised: 27 Apr 2010

See all articles by Jorn H. Block

Jorn H. Block

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

Marcus Wagner

Julius-Maximilians-University of Wuerzburg; BETA

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2006

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 ex-ploited by opportunity entrepreneurs are generally more profitable than are those ex-ploited 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: opportunity entrepreneurship, necessity entrepreneurship, opportunity discovery, opportunity exploitation, earnings equation

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

Suggested Citation

Block, Jorn Hendrich and Wagner, Marcus, Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials (June 1, 2006). Schmalenbach Business Review, Vol. 62, No. 4, pp. 154-174, 2010. Available at SSRN: https://ssrn.com/abstract=899968 or http://dx.doi.org/10.2139/ssrn.899968

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

Julius-Maximilians-University of Wuerzburg ( email )

Stephanstr. 1
Wuerzburg, D-97070
Germany

BETA ( email )

France

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