FULL AND PART-TIME ENTREPRENEURSHIP AND THE SUPPLY OF ENTREPRENEURIAL EFFORT: EVIDENCE FROM MEXICAN MICROENTERPRISES
Alejandro Mungaray () and
Martin Ramirez-Urquidy ()
Additional contact information Alejandro Mungaray: School of Economics and International Relations, Universidad Autónoma de Baja California, Calzada Tecnológico #14418, Colonia Mesa de Otay, Tijuana, Baja California, Mexico 22390, Mexico
This paper aims to study the influence of pecuniary and non-pecuniary aspects on entrepreneurship. It attempts to fill a gap in terms of explaining how these aspects determine individual and household choices or constraints regarding entering entrepreneurship as either part time, with participation in labor markets, or as full time, as well as the corresponding supply of entrepreneurial effort. The study searches for insights on the relation between motivations intrinsic in either form of entrepreneurship and their effects on the supply of the entrepreneurial effort. Part-time micro entrepreneurs respond more to non-pecuniary aspects when maximizing their life choices, which divert them from profit maximization. However, full-time micro entrepreneurs are more sensitive to pecuniary factors and their choices regarding utility maximization are more compatible with profit maximization, albeit both groups are part of simple forms of entrepreneurship. The results identify the expectations placed on enterprises run by part-time and full-time entrepreneurial households in terms of their motivation and attitude toward the goal of profit making and consequently, to entrepreneurial supply and performance. Both groups may be relevant from the policy standpoint and employment in developing economies.