An Empirical Analysis of Entrepreneurial Opportunity Identification and Their Decisive Factors: The Case of New Spanish Firms

Abstract

ABSTRACT The main objective of the analysis used in this work is to classify the entrepreneur's business opportunities and determine the factors that could explain them. This work offers two relative novel aspects to take care: i) the consideration of the business opportunity and the factors that explain it as a relevant element for analysis, and so perhaps fill the gap that exists in the empirical literature and, ii) the global analysis carried out where the characteristics of the entrepreneurship, the company and their environment are considered. The results obtained show that the business opportunity identified and exploited by an entrepreneur depends initially on his work experience, his previous experience in activities related to the present business activity and his level of education. Keywords: Entrepreneurship motivation, opportunity identification and development, human capital, experience INTRODUCTION Researchers have shown that the willingness of people to pursue entrepreneurial opportunities depends on such things as opportunity cost (Amit, Mueller, & Cockburn 1995), stocks of financial capital (Evans & Leigthon, 1989), social ties to investors (Aldrich & Zimmer, 1986), career experience (Carroll & Mosakowski, 1987), and motivational differences (Shane, Locke, & Collins, 2003). The identification of opportunities has been recognized as one of the most important abilities of successful entrepreneurs (Ardichvili, Cardozo, & Ray, 2003) and consequently has become an important element in the scholarly study of entrepreneurship. Not surprisingly there has been considerable interest in why, when, and how some people are able to identify opportunities, while others cannot or do not (Shane & Venkataraman, 2000). For an interesting and more complete review see (Shepherd & DeTienne, 2005). According to Shane, Locke, and Collins (2003: 259), in order to isolate the effects of entrepreneurial motivation, other factors that could have a causal effect on the process and outcome of entrepreneurship need to be controlled. In this respect, some of the most representative authors such as, Ottati (1994), Markusen (1996), Rabellotti (1998), (Lawson & Lorenz, 1999), Thomas (2000), or (Beugelsdijk & Noorderhaven, 2004), have incorporated into this area of knowledge aspects such as, the influence of innovation systems, entrepreneurial capacity and business culture, with the aim of evaluating whether these specific factors of the entrepreneurial phenomenon can be associated with regional and sectoral development. Glaeser, Kallal, Scheinkman, and Schleifer (1992) and Henderson, Kundoro, & Turner (1995) propose introducing the distinction between inter- or intra-industry effects. Shane, Locke, and Collins, (2003: 259) argue that while it is clear that the above factors need to be controlled if we are to fully understand how motivation is related to entrepreneurship, it is less clear how opportunities affect this relationship. Ardichvili, Cardozo, and Ray (2003) build on existing theoretical and empirical studies in the area of entrepreneurial opportunity identification and development, and utilize Dubin's (1978) theory building framework to propose a theory for the opportunity identification process. Within this context, the objective of this current work is to explore the factors that influence the analysis of the entrepreneur's identification and development of an opportunity, incorporating an endogenous approach in which we attempt to evaluate the entrepreneur's profile (according to a typology elaborated on the basis of their personal characteristics and the way they manage the firm's resources), without ignoring other exogenous factors relating to the region or sector that have already been considered in the literature mentioned above. With this objective in mind, our article is organised as follows: in the next section we develop the proposed theoretical framework for studying the factors that potentially condition the analysis of entrepreneurial opportunity identification and development. …

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