Necessity entrepreneurship in Latin America: it´s not that simple

• Published in: Entrepreneurship and regional development 2019-10, Vol.31 (9-10), p.953-983
• Main Authors: Puente, Raquel, González Espitia, Carlos Giovanni, Cervilla, María Antonia
• Format: Article
• Language: English
• Subjects: Entrepreneurs; Entrepreneurship; growth aspirations; Motivation; motivation dichotomy; necessity-driven; Regional development
• ISSN: 0898-5626; 1464-5114
• DOI: 10.1080/08985626.2019.1650294

Entrepreneurship literature takes for granted the motivation dichotomy; however, this simplistic view have been criticised for several studies because it likely does an injustice to entrepreneurs, particularly Latin America (LA) entrepreneurs. This study seeks to contribute to the body of knowledge on entrepreneurs to better explain the process of entrepreneurs being motivated by necessity. We use the Global Entrepreneurship Monitor (GEM) database for LA countries and develop an econometric model based on a set of variables, including contextual variables. First, we identify three types of entrepreneurial motivation: necessity, opportunity and transition. We then demonstrate that the motivation dichotomy does not represent LA entrepreneurship. Second, we find that necessity-driven entrepreneurship does not necessarily indicate the absence of high growth aspirations because some entrepreneurs in this category have such aspirations. Third, we observe that significant differences exist among entrepreneurs based on context, specifically among necessity-driven entrepreneurs. These findings have practical implications for research on entrepreneurship and for regional development.