A Network-based Approach on Opportunity Recognition

This paper argues that individuals differ in terms of their perception of opportunities because of the differences between the networks they are embedded in. We focus on two aspects of individuals’ embeddedness in networks, that is, (1) individuals’ belonging to residential areas that are more or less likely to be characterized by network cohesion, and (2) individuals’ differential access to network contacts based on the level of human capital they hold. Our analyses show that the nature of one’s residential area influences the perception of entrepreneurial opportunities. Further, we find a positive effect for education, i.e., people with a higher educational level are more likely to perceive entrepreneurial opportunities compared to those with a lower educational level.

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