Necessity and opportunity entrepreneurs: survival factors

Abstract The aim of this paper is to analyse the determinants of survival in entrepreneurship in Spain. For this purpose, a binary choice model is specified and estimated, using information from the Continuous Working Life Sample drawn from the Spanish social security records. This database provides information on the work experience of entrepreneurs, which is used to differentiate between necessity and opportunity entrepreneurs. Thus, we analyse whether necessity entrepreneurs differ from opportunity entrepreneurs in terms of survival. Moreover, through the Blinder-Oaxaca decomposition for nonlinear models, proposed by Yun (2004), the key factors affecting necessity and opportunity entrepreneurs are analysed. This methodology allows us to measure the difference in probability between both groups and to look further into the causes of this difference, through the unobservable component and the characteristics component. Observable factors indicate that there is a positive difference in survival probability in favour of opportunity entrepreneurs. Unobservable factors are not significant.Keywords Entrepreneurship.Firmsurvival.Opportunityentrepreneurs.Necessity entrepreneurs.Binarychoicemodel.Blinder-Oaxacadecompositio