Stratification, Economic Adversity, and Entrepreneurial Launch: The Effect of Resource Position on Entrepreneurial Strategy

Abstract

This paper analyzes whether or not the simple theory of income choice, which indicates there is a positive relationship between economic adversity and entrepreneurship, is applicable to all groups and may have been overgeneralized in entrepreneurship research. Using social stratification theory and the resource–based view, I explore how accumulated resource position differences between advantaged and disadvantaged entrepreneurial actor groups could result in their employing different strategies when exposed to economic adversity. I find that economic adversity has no relationship with entrepreneurship (self–employment rates) in advantaged or disadvantaged groups, and these groups use resources divergently due to their converse resource positions.