Resource endowment and opportunity cost effects along the stages of entrepreneurship

Tomasz Mickiewicz, Frederick Wedzerai Nyakudya (), Nicholas Theodorakopoulos and Mark Hart
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Frederick Wedzerai Nyakudya: Aston University
Nicholas Theodorakopoulos: Aston University
Mark Hart: Aston University

Small Business Economics, 2017, vol. 48, issue 4, No 8, 953-976

Abstract: Abstract In this paper, the start-up process is split conceptually into four stages: considering entrepreneurship, intending to start a new business in the next 3 years, nascent entrepreneurship and owning-managing a newly established business. We investigate the determinants of all of these jointly, using a multinomial logit model; it allows for the effects of resources and capabilities to vary across these stages. We employ the Global Entrepreneurship Monitor database for the years 2006–2009, containing 8269 usable observations from respondents drawn from the Lower Layer Super Output Areas in the East Midlands (UK) so that individual observations are linked to space. Our results show that the role of education, experience, and availability of ‘entrepreneurial capital’ in the local neighbourhood varies along the different stages of the entrepreneurial process. In the early stages, the negative (opportunity cost) effect of resources endowment dominates, yet it tends to reverse in the advanced stages, where the positive effect of resources becomes stronger.

Keywords: Entrepreneurship; GEM; Stages of entrepreneurship; Resources; Opportunity cost; Entrepreneurial capital; J23; J24; L26; R12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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DOI: 10.1007/s11187-016-9806-x

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