Template-type: ReDIF-Paper 1.0
Author-Name: Rodriguez Torres, Omar
Author-Email: orodriguez@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: How different are necessity and opportunity firms? Evidence from a quantile 
	 analysis of the Colombian microenterprise sector
Abstract: This paper explores the relationship between start-up motivation and
	 business performance, by looking into the extent to which start-up
	 motivation (necessity vs. opportunity) influences several business
	 performance indicators. Using the Colombian Small and Microenterprise
	 sector public dataset, we analyse the factors associated with
	 microenterprise performance using a quantile regression approach to
	 model the distribution of different measures of business performance.
	 Among the findings, we present evidence of statistically significant
	 differences among quantiles confirming the heterogeneity of start-up
	 motivation and other firm characteristics of the firms operating in the
	 sector. The results show that start-up motivation is a factor that
	 explains the difference in the distribution of the business performance
	 indicators under study. This findings contributes to the debate around
	 the connection between entrepreneurship and growth in the context of
	 developing economies. Even though firms motivated by necessity show a
	 lower level of profit, in particular for the firms that perform
	 relatively poorly, this is not necessarily associated with null or
	 diminishing growth rates. Necessity is not necessarily a deterrent for
	 growth. It needs to be understood as a means to support families that
	 otherwise would have no income-generating opportunities.
Classification-JEL: L25, L26, J48, M13, L53, O25
Keywords: Firm performance, entrepreneurship, public policy, new firms, enterprise
	 policy
Series: UNU-MERIT Working Papers
Creation-Date: 20210428
Number: 2021-019
File-URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-019.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2021019