Forced to Entrepreneurship: Modeling the Factors Behind Necessity Entrepreneurship

Abstract

There have been a large number of studies addressing the venture creation decision or entrepreneurship start-up models. Several of these models are built under normal condition assumptions where the individuals are motivated by personal goal achievement and have a support system for their endeavors. These are frameworks where the risk taker chooses to become an entrepreneur. It is important to recognize that not all businesses originate under the same circumstances. In countries where unemployment and low-income jobs prevail, individuals are forced to turn to entrepreneurship, in its self-employment form, as their last resource. This article presents a framework to recognize a growing phenomenon in which individuals, because they live in an economically challenged region, are pushed towards entrepreneurship, becoming necessity entrepreneurs. The model proposes that personal variables such as parental altruism and low educational level, and factors in the socioeconomic environment such as insufficient job opportunities, low income, and social marginalization, create an internal dissatisfaction that forces the person to the venture creation decision in its self-employment form. Country institutional profiles are proposed to play a moderating role between dissatisfaction and the venture creation decision.