Explaining entrepreneurial performance of solo self-employed from a motivational perspective

This paper investigates the relationship between start-up motivation (opportunity versus necessity) and entrepreneurial performance of an important subset of entrepreneurs, viz., the solo self-employed. We use a unique individual-level panel data set of solo self-employed in the Netherlands (2010-2011) and construct three separate measures derived from the literature to identify necessity-driven solo self-employment. Using annual turnover as measure of entrepreneurial performance, we consistently find that necessity-driven solo self-employed perform worse than opportunity-driven solo self-employed. Still, only a low proportion of necessity solo self-employment may be considered precarious employment, suggesting necessity entrepreneurship is not so worrisome as sometimes assumed. In general, our findings suggest that the borderline between necessity and opportunity entrepreneurship in developed economies may be less clear-cut than previously assumed.