"I Want to, But I also Need to": Start-Ups Resulting from Opportunity and Necessity

Marco Caliendo and Alexander Kritikos

No 966, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: When unemployed persons go into business, they often are characterized as necessity entrepreneurs, because push factors, namely their unemployment, likely prompted their decision. In contrast to this, business founders who have been previously employed represent opportunity entrepreneurs because pull factors provide the rationale for their decision. However, a data set of nearly 1,900 business start-ups by unemployed persons reveals that both kind of motivation can be observed among these start-ups. Moreover, a new type of entrepreneur emerges, motivated by both push and pull variables simultaneously. An analysis of the development of the businesses reflecting three different motivational types indicates a strong relationship between motives, survival rates and entrepreneurial development. We find in particular that start-ups out of opportunity and necessity have higher survival rates than do start-ups out of necessity, even if both types face the same duration of previous unemployment.

Keywords: Entrepreneurship; Push and pull motives; survival and failure; job creation (search for similar items in EconPapers)
JEL-codes: D81 J23 M13 (search for similar items in EconPapers)
Pages: 33 p.
Date: 2009
New Economics Papers: this item is included in nep-ent and nep-sbm
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Citations: View citations in EconPapers (36)

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