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A framework for investigating new firm entry: the (limited) overlap between informal-formal and necessity-opportunity entrepreneurship

Estrin, Saul ORCID: 0000-0002-3447-8593, Guerrero, Maribel and Mickiewicz, Tomasz (2024) A framework for investigating new firm entry: the (limited) overlap between informal-formal and necessity-opportunity entrepreneurship. Journal of Business Venturing, 39 (4). ISSN 0883-9026

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Identification Number: 10.1016/j.jbusvent.2024.106404

Abstract

We analyse entrepreneurial entry along the dimensions of informal-formal and necessity-opportunity entrepreneurship, distinguishing between them yet considering them jointly. While the dominant view in the literature conflates necessity with informal entry, and opportunity with formal entry, we hypothesise that informal entrepreneurship may be attractive to higher-income individuals as a testing ground for entrepreneurial ideas. We also explain why higher-income individuals may undertake necessity entrepreneurship. We utilise individual Global Entrepreneurship Monitor (GEM) data from Chile (2019-2021), which identifies informal-formal and necessity-opportunity entrepreneurial entry modes, to test hypotheses on the role of individuals´ income in the four types of entrepreneurial entry. We also consider changes in entrepreneurial entry during a crisis and a non-crisis periods. Our results confirm that the patterns in the data are consistent with hypotheses derived from our proposed theoretical framework.

Item Type: Article
Additional Information: © 2024 The Author
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Date Deposited: 18 Apr 2024 15:18
Last Modified: 13 Jun 2024 02:33
URI: http://eprints.lse.ac.uk/id/eprint/122663

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