Necessity-driven Entrepreneurs Research Articles

Role of Cultural Factors on Entrepreneurship Across the Diverse Economic Stages: Insights from GEM and GLOBE Data

Abstract This article conducts an exploration of culture’s roles on entrepreneurial activities among countries at different economic stages. Culture factors from the GLOBE are converted into motivation culture and hygiene culture. The framework of this research is derived from Herzberg’s motivation hygiene theory. Total entrepreneurial activity (TEA) and the ratio of opportunity-driven to necessity-driven entrepreneurship (OPP/NEC) from global entrepreneurship monitor (GEM) are taken as measures for both the quantity and quality of entrepreneurial behavior. Panel regression with fixed effects is employed to test both direct and interaction effects. The direct relations show that the improvement of economic conditions discourages the TEA, while promotes the OPP/NEC; motivation culture significantly promotes OPP/NEC, while makes no difference in TEA; and hygiene culture significantly promotes TEA, while reduces OPP/NEC. In terms of interactive effects, motivation culture reduces the containment of economic development on TEA, yet hygiene culture hurts its promotion on OPP/NEC; motivation culture mitigates hygiene culture’s stimulation of TEA, while hygiene culture damages motivation culture’s fostering of OPP/NEC. Finally, a global culture map of quadrant distribution diagram is visually drawn with the corresponding culture scores. Notably, countries or regions in quadrant IV with high motivation culture and low hygiene culture demonstrate the most favorable entrepreneurial quality as well as high economic development.

Understanding the link: the competencies and motivations of nascent entrepreneurs to engage in sustainable entrepreneurship

ObjetivoEste artigo tem como objetivo compreender a relação entre as competências empreendedoras (autoeficácia e capital social), e o empreendedorismo sustentável e sua incidência por meio de motivações empreendedoras (empreendedorismo de oportunidade e necessidade).Design/metodologia/abordagemAdotamos uma abordagem quantitativa e usamos regressões de mínimos quadrados ordinários (OLS) e análise de bootstrapping para testar nossas hipóteses sobre a relação entre competências empresariais e empreendedorismo sustentável mediada por motivações empresariais usando uma amostra transversal de 2.356 empreendedores nascentes do relatório Global Entrepreneurship Monitor (GEM) 2021–2022.ResultadosAs evidências sugerem que o empreendedorismo sustentável é influenciado positivamente pelo empreendedorismo orientado pela oportunidade e pela necessidade. Além disso, os resultados mostram que ambas as motivações empresariais mediam positivamente a relação entre a autoeficácia e o empreendedorismo sustentável.OriginalidadeNossa abordagem se afasta da perspectiva unidimensional tradicional sobre as motivações empresariais, reconhecendo que um empreendedor pode incorporar simultaneamente vários graus de ambos os ases motivações. Ao integrar o estudo das competências e motivações empresariais ao empreendedorismo sustentável, obtemos uma compreensão holística da dinâmica em jogo.

Exploring entrepreneurial intentions and motivations: a comparative analysis of opportunity-driven and necessity-driven entrepreneurs

This study investigates the impact of entrepreneurial attitudes, subjective norms, and perceived behavioral controls on entrepreneurial intention among two distinct groups of entrepreneurs: opportunity-driven and necessity-driven. It also explores the relationship between entrepreneurial motivations, intentions, and the number of ventures undertaken by entrepreneurs. Structural equation modeling and survey data from 201 necessity-driven entrepreneurs and 204 opportunity-driven entrepreneurs were utilized. Drawing on the Theory of Planned Behavior, the findings indicate that attitudes do not positively correlate with entrepreneurial intention for both types of entrepreneurs. Subjective norms significantly influence entrepreneurial intention among entrepreneurs by necessity but not among entrepreneurs by opportunity. Perceived behavioral controls exhibit a partial correlation with entrepreneurial intention, which is not significant for entrepreneurs by opportunity. Both motivations and entrepreneurial intention positively relate to the number of ventures undertaken by entrepreneurs by necessity, whereas motivations alone determine venture creation among entrepreneurs by opportunity. Furthermore, a significant correlation exists between being a female entrepreneur by necessity and entrepreneurial intention, while this relationship is not significant for women entrepreneurs by opportunity. These insights contribute to the literature on entrepreneurial intention and carry important policy and managerial implications in developing countries.

Quid pro quota: a cross-country study on the impacts of immigration quotas on early-stage entrepreneurship

AbstractWe study the impacts of immigration quotas and immigrant eligibility restrictions on destination countries’ early-stage entrepreneurial activity. Taking advantage of cross-country variation in immigration quotas and eligibility restrictions, we find that increases in the strictness of labor migration quotas and eligibility requirements are associated with significantly less early-stage entrepreneurship in the short run. Further, we find two important sources of heterogeneity that impact our results. First, these results are driven by a connection between quotas and early-stage necessity-driven entrepreneurship—our results lose significance when adding opportunity-driven entrepreneurship to the analysis. Second, the magnitude of the relationship between quotas and early-stage entrepreneurial activity is lower when analyzing female entrepreneurship. Overall, our results suggest that immigrants clearly influence entrepreneurship positively, but the overall welfare effects on the host country of marginal increases in entrepreneurial activity associated with a relaxation of labor market restrictions are more nuanced. At the same time, our results also suggest room for immigration policy to improve the welfare of immigrants and natives. Importantly, our estimates likely act as a lower bound given that we are not able to measure impacts in the long run. Because immigrants’ participation in the labor market is often delayed by labor market restrictions after entry, estimates of the impact of quotas and other restrictions that limit entry into the host country would likely yield more negative results given a longer time horizon.

Government expenditure and entrepreneurial activity: considering the types of entrepreneurial motivations

ABSTRACT As a cross-national study, we analyze the relationship between the functional-level government expenditure and the different types of entrepreneurship, that is, whether it is an opportunity- or necessity-based entrepreneurship. Our analysis of 17 Organization for Economic Cooperation and Development (OECD) nations revealed that government investments in economic affairs are positively related to opportunity-driven entrepreneurship, but negatively to necessity-driven entrepreneurship. On the other hand, government spending on education is positively related to necessity-driven entrepreneurship. Further, we find that larger government expenditure on education in Asian countries encourages more entrepreneurs to start their businesses than the rest of the OECD.

The roles of big businesses and institutions in entrepreneurship: A cross-country panel analysis

This study aims to determine whether big business or institutions comprise a more significant entrepreneurship determinant. In addition, we have three subobjectives: We examine (1) how the relationship between big businesses and entrepreneurship changes according to the economic development stage; (2) if big businesses affect the two different entrepreneurship types, namely, opportunity- and necessity-driven entrepreneurship, differently; and (3) which institutional factors are effective for these two different entrepreneurship types. To this end, we compare the effects of big businesses and institutions on entrepreneurship among 33 countries covering lower-middle-, upper-middle-, and high-income countries during the 2001–2015 period. Among the various determinants of entrepreneurship, we focus on two key factors that affect entrepreneurship, namely, big businesses and institutions while controlling for the demand- and supply-side factors that influence entrepreneurship. This study conducts fixed-effect estimations. We find that the relationship among entrepreneurship, big businesses, and economic development is “N-shaped.” In particular, there is a positive relationship between big businesses and opportunity-driven entrepreneurship in high-income countries. Moreover, among the various institutional factors, only supportive public policies toward new firms and positive social perceptions toward entrepreneurs are effective for opportunity-driven entrepreneurs, whereas none of the institutional factors are effective for necessity-driven entrepreneurs.

COVID-19 Pandemic and Household Entrepreneurship in Nigeria: Do Crises Create Necessity-driven and/or Innovative Entrepreneurship?

The need for promoting entrepreneurship stems from the efforts to provide long-lasting solutions to the challenges of poverty and unemployment. This becomes even more crucial in worldwide crises such as the COVID-19 pandemic. The COVID-19 pandemic has not only had a momentous effect on businesses and economies but has also driven us to recognize the importance of entrepreneurship. This study explores the combination of important entrepreneurial and household factors that drive the growth of new businesses during and after the crisis. This study applies the Round 2 data from the Nigeria National Longitudinal Phone Survey Phase 2 conducted by the National Bureau of Statistics in collaboration with the World Bank between November 2021 and August 2022. The logistic regression model analyzes how job loss due to the pandemic correlates with the probability of household heads starting and operating an enterprise immediately after the pandemic and the probability for the existing household entrepreneurs to innovate. The findings show that necessity-driven entrepreneurship became effective immediately after the COVID-19 pandemic in Nigeria, and innovation and opportunity recognition were more relevant as success factors during periods of crisis than during regular times. This is because the crisis produced a new set of highly competitive and strategic entrepreneurs that quickly adapted to new situations or conditions through their innovative capacity. Several policy recommendations derived from the study’s empirical findings are discussed in the conclusion section of the article. JEL Classification I1, D1, L26, F44, C35, N97

The Relationship between Institutional Environments and Thai Hospitality-Oriented Entrepreneurship through the Moderating Role of Educational Support: A Mixed Methods Approach

This research draws upon an institutional theory framework to explore the underlying factors that influence opportunity-driven and necessity-driven entrepreneurship. The objective is to analyze how the institutional environment either supports or impedes the establishment and expansion of ventures within the Thai hospitality industry. By examining the interplay between the country’s institutional determinants and entrepreneurial behaviors, the study contributes to the existing body of academic literature on entrepreneurship and institutional theory. Furthermore, education support is treated as a moderator in the relationship between the three determinants of the institutional environment theory: regulatory, cognitive, and normative dimensions, and opportunity-necessity-driven entrepreneurship activity. This study adopted a mixed methods approach. For the quantitative approach, national data were mainly collected from the GEM and IEF databases from 2015 to 2018 (n = 939) using binary logistic regression to validate the hypotheses. Regarding the qualitative approach, data were obtained through in-depth interviews with 20 hotel and restaurant entrepreneurs. The findings indicated that the normative and cognitive determinants have a direct impact on both opportunity-driven and necessity-driven entrepreneurship activity. Additionally, the study reveals that the relationship between a regulative environment and opportunity-necessity entrepreneurship activity is moderated by educational support. The results provided new insights into Thailand’s hospitality-oriented entrepreneurship at large.

Conditions that make ventures thrive: from individual entrepreneur to innovation impact

Entrepreneurship and innovation create a positive impact on the economy and society. Globally, governments invest resources to support new ventures and facilitate innovation. In this study, we examine this phenomenon by studying the pathway that goes from individual entrepreneur to innovation impact. We measure the effect of entrepreneurial motives on different types of innovations, with a particular focus on its amplification by formal and informal institutional conditions. Specifically, we use multi-level models to analyze annual data of 29 countries for 2006 to 2018. We find that opportunity-driven entrepreneurs are associated with higher levels of radical innovation, breakthrough innovation, and disruptive innovation. Better tax policies and less bureaucracy amplify this positive effect on radical innovation and breakthrough innovation. For necessity-driven entrepreneurs, the regulatory quality amplifies the positive effect on radical innovation and disruptive innovation, while monetary resources dampen this effect. Our findings show that the differences in innovation impact can be explained by differences in entrepreneurial motives and their specific interactions with formal and informal institutional conditions.

The Impact of Innovation on Economic Growth, Foreign Direct Investment, and Self-Employment: A Global Perspective

This paper aims to investigate the impact of innovation on three macroeconomic indicators: GDP, self-employment, and foreign direct investment (FDI). The study analyses a sample of 120 countries using the Global Innovation Index (GII) and its constituent sub-indices and pillars, which provide a holistic evaluation of national innovation. Gross domestic product (GDP) per capita measures a country’s economic output, self-employment assesses entrepreneurial activity, and FDI indicates confidence in a country’s economic prospects and innovation trends. This study analyzes the data using generalized-linear and panel-corrected standard-error models. The results show that innovation positively influences GDP, domestic institutional framework, local infrastructure, local knowledge and technology, and creative outputs. In contrast, innovation negatively correlates with domestic self-employment, often associated with necessity-driven entrepreneurship. The study concludes that innovation positively affects human resources, research, and creative outputs and has no significant impact on FDI. The findings suggest that a practical regulatory framework, institutional support, domestic human capital, research and development, infrastructure, technology, and creative outputs are essential for a vibrant economy. National innovation policies supporting the GII and its constituent factors can positively affect the economy while reducing self-employment.

Do Tax Rates Matter for Entrepreneurial Motivations? An Empirical Approach

There are a number of factors that can hinder the path of entrepreneurship development and the literature highlighted the fact that taxes are one of the most important barriers for entrepreneurs. This paper aims at identifying the relationship between tax rates and entrepreneurship and to establish the impact of tax rates on entrepreneurs considering their motivations (necessity, opportunity or improvement-driven opportunity). The research focuses on a sample of 46 countries grouped according to their income level, for a period of eight years (2012-2019). In order to test our hypotheses, we use multiple linear regression based on balanced panel data and we consider, as dependent variables, indicators that measure entrepreneurship and entrepreneurial motivations (early-stage entrepreneurial activity, necessity-driven entrepreneurs, opportunity-driven entrepreneurs, improvement-driven opportunity entrepreneurs, and motivational index). As independent variables, we consider indicators that measure the tax rates supported by entrepreneurs (total tax and contribution rate, profit tax, labor tax and contributions, and other taxes payable by businesses). The results show that tax rates play a key role in fostering the creation of new companies. Moreover, the impact is different, depending on the entrepreneurs’ motivations. Entrepreneurs motivated by necessity are positively related to total tax and contribution rate, while those motivated by opportunity are negatively related with this indicator. Therefore, tax rates discourage the entrepreneurs that seek innovation, but they do not affect those that do not have other options to obtain the necessary income for living.

Explaining the Positioning of Agricultural Entrepreneurs on the Necessity-Opportunity Continuum in Sub-Saharan Africa: Insights from Benin

ABSTRACT Despite the potential of agriculture to reduce unemployment in sub-Saharan Africa, research on agricultural entrepreneurship is scarce, especially regarding the entrepreneurs’ motivations. The aim of this research is to examine the intensity of necessity and opportunity motivations among agricultural entrepreneurs and the influence of socioeconomic characteristics, personality, and environmental factors. Hence, the study reports a survey of 819 agricultural entrepreneurs in Benin and uses multinomial logistic regressions. Most agricultural entrepreneurs are moderately necessity-driven (76%); the remainder includes highly necessity-driven entrepreneurs (4%), moderately opportunity-driven entrepreneurs (6%), and highly opportunity-driven entrepreneurs (14%). Those displaying higher intensity of necessity motivations can be at any education level, are former employees, are less proactive, less optimistic, and operate in the services sector. In contrast, highly opportunity-driven entrepreneurs are likely to have received a university education and agricultural professional training, operate in the services sector, and have better access to finance and technologies. This study advances the push-pull theory by revealing a richer set of entrepreneurial motivations beyond the simplistic dichotomic view. Hence, policymakers could devise entrepreneurship strategies and programs that consider the diverse motivations of entrepreneurs and the influencing factors to move them toward increased opportunity entrepreneurship.

Identifying the Sources of Work-family Conflict among Women Entrepreneurs in Iran: A Comparison between Opportunity- and Necessity-driven Women Entrepreneurs

The purpose of this paper is to identify the sources of work-family conflict among Iranian women entrepreneurs and bridge the academic gap in this area. In this regard, the paper tries to employ opportunity- and necessity-driven entrepreneurship theory. The qualitative approach was used through conducting 15 in-depth interviews with Iranian women entrepreneurs in the Semnan province. According to the results, Sources of work-family conflict for Iranian women entrepreneurs were categorized into: social, cultural, family, and personal categories. These sources are different with opportunity- and necessity-driven Iranian women entrepreneurs.

Sustainable entrepreneurship out of entrepreneurial opportunity identification: The mediating role of psychological capital.

The aim of the present study, was to examine the simultaneous effects of entrepreneurial opportunity identification (EOI) and psychological capital (PC) on university students' entrepreneurial intention (EI). Compared with necessity-driven entrepreneurship, opportunity-driven entrepreneurship is more sustainable. Scholars have shown that EOI is key to forming EI, but little has been discussed about its association with PC. A total of 555 university students in China were enrolled by means of convenience sampling. Descriptive statistics and correlation analysis of variables were performed using SPSS 21.0 software. Structural equation modeling analysis (SEM) with AMOS 21.0 was used to examine the structural effects of EOI and PC on university students' EI. According to the results, university students' EOI and PC had a positive and insignificant influence on their levels of EI. Furthermore, PC was found to fully mediate the impact of EOI on EI. The present study could shed light on new instructions to examine the interaction between the cognitive and psychological components of EI in the field of entrepreneurship. It is recommended that educators and practitioners should pay regard to the role of EOI and PC.

Entrepreneurship in Latin America: Skills and Education for COVID-19 and Beyond

Entrepreneurship is a topic that has become more relevant in recent years and the Covid-19 pandemic has made it even more so. Indeed, in the context of the 2020 pandemic, some entrepreneurial initiatives have risen as an option for employment and income given the lack of job alternatives or as a consequence of displacement from previous economic activities (necessity-driven entrepreneurship); at the same time, various changes brought about or accelerated by the pandemic have given rise to new business opportunities (opportunity-led entrepreneurship). In this review work, we discuss the personal characteristics of the entrepreneur that favor the development of successful opportunity-led ventures in Latin America in the context of Covid-19 and beyond. In general, these personal characteristics or endowments can refer to abilities, capacities and other traits that influence the behavior of entrepreneurs and their response to diverse circumstances in the process of entrepreneurship. They include creativity, innovation, leadership and risk tolerance, and also academic level, work experience and social networks. The pandemic has brought about changes in the way these diverse factors influence successful entrepreneurship and, thus, represent a challenge for entrepreneurship education. Business schools, in particular, through their degree programs and continuous training, play a key role in providing management tools and favoring the development of skills better adapted to the formation of opportunity-led entrepreneurs in the Covid-19 and post-pandemic contexts.

The impact of housing price on entrepreneurship in Chinese cities: Does the start-up motivation matter?

Until recently, studies of the driving forces and determinant factors of entrepreneurial entry and the emerging literature on the housing-entrepreneurship nexus have been developing independently of each other. This study attempts to connect these two strands of literature through an examination of the impact of urban housing price on the self-employment choices of urban individuals driven by different start-up motives in urban China. Drawing upon a sample of urban individuals developed from the 2016 China Labor-force dynamics data, this study finds that a high level of urban housing price exerts a significantly negative impact on urban individuals' propensity to engage in necessity-driven entrepreneurship, but exhibits no significant influence on opportunity-driven entrepreneurship. The negative consequence of high housing price is most pronounced for necessity-driven entrepreneurs who are not home owners. This study proposes the incorporation of start-up motivation in public policy support for entrepreneurship.

The impact of the big five personality variables on self-employment survival.

Based on large, representative Australian household panel, this study investigates to what extent the Big Five personality variables influence self-employment survival and differentiates between successful or unsuccessful exit. In addition, the influence of two moderating variables, tertiary education and the motivation to become self-employed, are considered. Contrary to expectations, we found no impact of the Big Fives variable on self-employment survival in general. In the case of unsuccessful exit, we found that entrepreneurs with a higher level of Conscientiousness tend to stay self-employed although they may not be satisfied with their job. Similarly, entrepreneurs with a tertiary education prolong unsuccessfully self-employment stints, particularly if they exhibit higher level of Emotional Stability. Necessity-driven entrepreneurs exit unsuccessful stints earlier, especially if they exhibit a lower level of conscientiousness.

Narrative Insights Reveal the Motivations of Young Agricultural Entrepreneurs in Laos

The participation of youth in agricultural entrepreneurship (agripreneurship) is beneficial for the sustainable development of agrarian societies that are transitioning towards the commercialization of agriculture. Accordingly, we investigated the phenomena that motivate practicing young, small- and medium-scale agripreneurs to pursue their careers, using the Lao People’s Democratic Republic (Laos) as a case study. To achieve this, we applied narrative inquiry techniques to the accounts of 74 young Laotian agripreneurs regarding their entry into agripreneurship. This enabled us to identify and describe common and influential paradigms that were subsequently interpreted from the perspective of entrepreneurship and behavioral studies of career decision making to explain the influence of motivations on the young agripreneurs. Our study has shown that despite the characteristics that set agripreneurship in Laos apart from entrepreneurship in general, commonly identified typologies of entrepreneurial motivation, particularly income, extrinsic benefits and emotional paradigms also motivate Lao youth to become agripreneurs. The application of narrative inquiry has revealed the emphasis some practicing agripreneurs in Laos place on the attainability of their career, which resulted in its practice by both opportunity-driven and necessity-driven entrepreneurs, with implications for the sustainable development of other countries in transition to commercial agriculture.

Entrepreneurial fear of failure: An international comparison of antecedents and impact on venture creation

ABSTRACT Fear of failure is a key barrier in starting a business throughout the world due to the high risks involved to the founders’ finances, relationships, status, and self-esteem. Using Global Entrepreneurship Monitor data, it was observed that countries with high fear of failure have low total early-stage entrepreneurial activity for developed countries only, and that the gap between the ratio of men to women entrepreneurs in countries with high fear of failure is narrower. Countries with higher self-perceived capabilities are lower in fear of failure. However, societal norms, education, access to funding, and perceived government policy had little effect. Countries with greater economic development seem lower in fear of failure than those less developed and the higher the rate of necessity-driven entrepreneurship, the less relevant fear of failure becomes in inhibiting entrepreneurship. This article aims to understand which factors can influence fear of failure to allow governments to put in place policies to reduce this as a barrier to start-ups, which ultimately influences the country’s prospects for economic growth. This article can be used to encourage policies that can be tailored to each country’s unique ecosystem based on the underlying reasons for fear of failure in that country.

Analysis of Socio-Demographics of Necessity-driven Entrepreneurs in Selected Cities in Ghana

The study analysed the dynamics of necessity-driven entrepreneurs, using the sociological approach to start-ups. The paper explored the risk appetite and the entrepreneurial potential of those involved in the street hawking business. Utilising the sequential transformative design, structured interviews were used to collect data from 306 street hawkers in Accra, Kumasi, and Cape Coast. Subsequently, 25 follow-up interviews were conducted, using a structured interview guide. Data were collected over ten months due to the complex nature of the respondents of the study. Descriptive statistics and texts were used to analyse the data. The results indicated that the majority of the respondents had only basic education or no formal education. Furthermore, the respondents were mostly women and young people without formal jobs nor any means of livelihood. The study has implications for policy on education, especially basic and adult education, as several of the respondents barely have basic education. There needs to be a social intervention programme to equip the street hawkers with the right employable skills to help develop their skills and promote the growth of their businesses. The paper also makes a case for nurturing their skills as a means of poverty alleviation.