Why are some people more likely to become small-businesses owners than others: Entrepreneurship entry and industry-specific barriers

Why are some individuals more likely to become owners of small businesses than others? We classify industries using measures of entry barriers and proceed to investigate how determinants of entry vary in high- as opposed to low-barrier fields. Claims that neither financial-capital constraints nor th...

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Bibliographic Details
Published in:Journal of business venturing 2014-03, Vol.29 (2), p.232-251
Main Authors: Lofstrom, Magnus, Bates, Timothy, Parker, Simon C
Format: Article
Language:English
Subjects:
Berufliche Mobilität
Branche
Determinante
Eigenkapital
Entrepreneurs
Entrepreneurship entry
Entry barriers
Humankapital
Klein- und Mittelbetrieb
Market entry
Mobilitätsbarriere
Qualifikationsanforderung
Small business
Studies
Unternehmensgründung
Unternehmer
USA
Vermögen (Wirtsch)
Ökonomische Determinanten
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Summary:Why are some individuals more likely to become owners of small businesses than others? We classify industries using measures of entry barriers and proceed to investigate how determinants of entry vary in high- as opposed to low-barrier fields. Claims that neither financial-capital constraints nor the educational backgrounds of aspiring small-business owners predict the likelihood of small-business entry are investigated in this context. These claims of irrelevance, we find, are inconsistent with the facts. The wealth and educational background characteristics potential entrepreneurs possess predispose them to make distinctly different industry choices, both because of the differing rewards available to them and the very different entry barriers they face. The characteristics of potential entrants, in other words, draw them toward some industries and away from others. ► Traits of potential entrepreneurs draw them toward some types of new ventures and away from others. ► High personal wealth sometimes predicts entrepreneurial entry and sometimes it doesn't. ► The college graduate trait negatively predicts entry into many lines of small business.
ISSN:0883-9026
1873-2003
DOI:10.1016/j.jbusvent.2013.01.004