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Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earning s Differentials

  • Necessity Entrepreneurship
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Schmalenbach Business Review Aims and scope

Abstract

In this paper we discuss necessity and opportunity entrepreneurship. We use panel data to analyze how these two types of entrepreneurs differ in general, and in their ability to discover and exploit entrepreneurial opportunities. We find that the opportunities exploited by opportunity entrepreneurs are generally more profitable than are those exploited by necessity entrepreneurs. We also find that the determinants of success differ to a strong degree. Standard wage equations seem to work better for opportunity than for necessity entrepreneurs. Our findings indicate a need to distinguish between the two groups in entrepreneurship theory and practice.

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Authors and Affiliations

  1. Department of Applied Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, Netherlands

    Joern H. Block

  2. Schöller Chair in Technology and Innovation Management, Technische Universität München, Arcisstraße 21, 80333, München, Germany

    Joern H. Block

  3. Chair in Entrepreneurship and Corporate Growth, Julius-Maximilians-Universität Würzburg, Stephanstraße 1, 97070, Würzburg, Germany

    Marcus Wagner

  4. Bureau d’Economie Théorique et Appliquée, 61 avenue de la Fôret Noire, 67085, Strasbourg, France

    Marcus Wagner

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  1. Joern H. Block
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  2. Marcus Wagner
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Correspondence to Marcus Wagner.

Additional information

Both authors contributed equally to this work.

We thank Marc Gruber, Dietmar Harhoff, Florian Heiss, Joachim Henkel, Karin Hoisl, Philipp Koellinger, Philipp Sandner, and Hagen Worch for comments on earlier versions of the paper. Also, we thank the area editor and two anonymous reviewers for their suggestions as well as for feedback at the 2006 G-Forum, the 2007 Academy of Management Meeting, the Max Planck Institute of Economics and the Institutes for Empirical Economic Research and for Innovation Research, Technology Management and Entrepreneurship at Ludwig-Maximilians-Universität München. A shorter version of this paper appeared in the best paper proceedings of the 2007 Meeting of the Academy of Management (Block and Wagner (2007)).

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Block, J.H., Wagner, M. Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earning s Differentials. Schmalenbach Bus Rev 62, 154–174 (2010). https://doi.org/10.1007/BF03396803

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