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Differences Between Being Opportunity-Driven and Necessity-Driven Entrepreneur: Evidence From Turkey's GEM Data

Özdemir, Özlem
Karadeniz, Esra
According to the literature, an individual becomes an entrepreneur with two types of motivations: taking advantage of a business opportunity or having no better options for work. The former ones are called opportunity-driven entrepreneurs (ODE) and the latter is called necessity-driven entrepreneurs (NDE). This paper investigates the differences between them and further explore the factors that influence being ODE and NDE. For these purposes, we collected data in Turkey through using the national adult population survey based on the Global Entrepreneurship Monitor (GEM) project for 3 years (2006-2008). Results confirm that a Turkish entrepreneur that has started the business with the motive of opportunity significantly differs from the ones that have been motivated out of necessity. The possibility of being NDE is higher for the individuals with lower income level. However, the likelihood of being ODE is affected by age. Contrary to the literature, especially for the later years (2007 and 2008), younger people are more likely become ODE. Necessity and opportunity entrepreneurs differ also in terms of their perceptions. In 2006, while knowing someone personally who had started a small business i.e. networking is the main perceptual factor affecting being NDE, one perceiving herself/himself as a knowledgeable, skilled, and experienced person i.e. self-confidence seems to be the major perceptual determinant of taking opportunities to become an entrepreneur, being ODE. However, the picture is different for the following years (2007 and 2008). Both networking and self-confidence are found to influence the likelihood of NDE and ODE. Thus, no matter what the motivation is, one that has networking and self-confidence is more likely to start a new small business in Turkey. These findings are very insightful not only for enhancing the understanding the entrepreneurial environment in Turkey and that way is useful for international traders, but also for policy makers that try to find ways to increase entrepreneurial activities in Turkey.