Human Capital and Entrepreneurial Motivation

In this paper the initial research question is stated as the determination of correlation between human capital and entrepreneurial activity motivation. The scientists investigating the phenomenon of entrepreneurship and human capital interdependence have not been yet paid attention to the determination of the casual relationship between entrepreneurial motivation and human capital. According to the motivation entrepreneurs in this paper are distinguished on opportunity and necessity driven. Opportunity driven entrepreneurs are those, who have the aspiration to become self-independent. On the opposite, necessity driven entrepreneurs establish a new enterprise, because they have no other choice of employment. The special attention in this analysis is devoted to the examination of the human capital influence on decision of becoming an opportunity-driven entrepreneur. The explanatory variables are divided in two groups: variables on the aggregate level and individual variables. There are several individual explanatory variables: education, cognitive abilities, fear of failure, self-confidence, acquaintance with other entrepreneurs, prestige of entrepreneurship, age and gender. The explanatory variable on the aggregate level are the GDP per capita and the rate of unemployment. The investigation is carried out using Individual Level Data 2012 questionnaire from GEM project. Data concerning the external economic conditions are obtained from the World Bank website. The hypothesis stated in this paper is tested on 15449 entrepreneurs. The evidence reveals the higher likelihood of becoming an opportunity-driven entrepreneur for individuals with a noticeable human capital reserve. Results indicate that individual’s decision on starting a business would be facilitated by the level of education rather than by other components of human capital.