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 en...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/04/26218482/opportunity-versus-necessity-understanding-heterogeneity-female-micro-entrepreneurs http://hdl.handle.net/10986/24210 |
| 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 paper exploits a
unique data set covering a wide array of characteristics,
including cognitive skills, non-cognitive 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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