From poverty trap to commodity trap: entrepreneurship and well-being among the poor

Michael H. Morris (), Sohrab Soleimanof (), Marcello Calle () and Reginald Tucker ()
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Michael H. Morris: University of Notre Dame
Sohrab Soleimanof: Louisiana State University
Marcello Calle: Universidad del Azuay
Reginald Tucker: University of Oklahoma

Small Business Economics, 2025, vol. 65, issue 2, No 20, 1159-1181

Abstract: Abstract Building on disadvantage theory and the capabilities framework, the research explores how two critical aspects of the poverty experience, experienced scarcity, and a limited opportunity horizon, can result in the creation of ventures that struggle to achieve marketplace success, which in turn detracts from the entrepreneur’s perceived well-being. These business struggles are traced to a commodity trap, where the business is not well differentiated in the marketplace, suffers from low volumes and margins, has little bargaining power, and is labor-intensive and capacity-constrained. A set of hypotheses regarding these relationships are tested using data from a sample of entrepreneurs from poverty backgrounds within Ecuador. The results provide support for the hypothesized relationships. Disadvantages from poverty translate into disadvantages within a business, and failure to overcome these disadvantages results in a lower sense of well-being on the part of the entrepreneur. Implications are drawn for theory and practice.

Keywords: Entrepreneurship; Poverty; Commodity trap; Opportunity horizon; Resource scarcity; Subjective well-being (search for similar items in EconPapers)
JEL-codes: L25 L26 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-025-01045-y

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