Opportunity versus Necessity : Understanding the Heterogeneity of Female Micro-Entrepreneurs
Entrepreneurs that voluntarily choose to start a business because they are able to identify a good business opportunity and act on it opportunity entrepreneurs might be different along various dimensions from those who are forced to become entrepre...
| Main Authors: | , , |
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| Language: | English |
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Published by Oxford University Press on behalf of the World Bank
2019
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| Online Access: | http://documents.worldbank.org/curated/en/735801565608264531/Opportunity-versus-Necessity-Understanding-the-Heterogeneity-of-Female-Micro-Entrepreneurs http://hdl.handle.net/10986/32234 |
| Summary: | Entrepreneurs that voluntarily choose to
start a business because they are able to identify a good
business opportunity and act on it opportunity entrepreneurs
might be different along various dimensions from those who
are forced to become entrepreneurs because of lack of other
alternatives necessity entrepreneurs. To provide evidence on
these differences, this article exploits a unique data set
covering a wide array of characteristics, including
cognitive skills, noncognitive skills, and managerial
practices, for a large sample of female entrepreneurs in
Mexico. Descriptive results show that on average opportunity
entrepreneurs have better performance and higher skills than
necessity entrepreneurs. A discriminant analysis reveals
that discrimination is difficult to achieve based on these
observables, which suggests the existence of unobservables
driving both the decision to become an opportunity
entrepreneur and performance. Thus, an instrumental
variables estimation is conducted, using state economic
growth in the year the business was set up as an instrument
for opportunity, to confirm that opportunity entrepreneurs
have higher performance and better management practices. |
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