Amit, R., Muller, E., & Cockburn, I. (1995). Opportunity Costs and Entrepreneurial Activity. Journal of Business Venturing, 10(2), 95-106.

Question 1

What is the proposed hypothesis of this paper? (Amit, R., Muller, E., & Cockburn, I. (1995)

Answer 1

The lower the opportunity costs of individuals, the more likely they are to undertake entrepreneurial activity

Question 2

What do relatively low wages may cause?

Answer 2

It may cause individuals to consider the development of their own business. This could imply that employees who choose to become entrpreneurs are less capable than other employed individuals. This could in part explain the high failure rate.

Question 3

What can a corporate setting lead to?

Answer 3

A corporate setting can lead to entrepreneurial abilities and attitutes being blocked. This behaviour dimensions may cause poor job performance.

Question 4

What is the relation between opportunity costs and engagement in entrepreneurial activities?

Answer 4

The larger the alternative compensation of the entrepreneur, the less likely he/she is inclined to engage in entrepreneurial activities.

This fact is independent of his/her ability or the level of risk aversion