Why are some people more likely to become small-businesses owners than others: Entrepreneurship entry and industry-specific barriers

Magnus Lofstrom, Timothy Bates and Simon Parker ()

Journal of Business Venturing, 2014, vol. 29, issue 2, 232-251

Abstract: Why are some individuals more likely to become owners of small businesses than others? We classify industries using measures of entry barriers and proceed to investigate how determinants of entry vary in high- as opposed to low-barrier fields. Claims that neither financial-capital constraints nor the educational backgrounds of aspiring small-business owners predict the likelihood of small-business entry are investigated in this context. These claims of irrelevance, we find, are inconsistent with the facts. The wealth and educational background characteristics potential entrepreneurs possess predispose them to make distinctly different industry choices, both because of the differing rewards available to them and the very different entry barriers they face. The characteristics of potential entrants, in other words, draw them toward some industries and away from others.

Keywords: Entrepreneurship entry; Entry barriers (search for similar items in EconPapers)
JEL-codes: J24 L26 M13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (81)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:29:y:2014:i:2:p:232-251

DOI: 10.1016/j.jbusvent.2013.01.004

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