Document Type
Article
Publication Date
8-1-2025
Abstract
Building on disadvantage theory and the capabilities framework, the research explores how two critical aspects of the poverty experience, experienced scarcity, and a limited opportunity horizon, can result in the creation of ventures that struggle to achieve marketplace success, which in turn detracts from the entrepreneur’s perceived well-being. These business struggles are traced to a commodity trap, where the business is not well differentiated in the marketplace, suffers from low volumes and margins, has little bargaining power, and is labor-intensive and capacity-constrained. A set of hypotheses regarding these relationships are tested using data from a sample of entrepreneurs from poverty backgrounds within Ecuador. The results provide support for the hypothesized relationships. Disadvantages from poverty translate into disadvantages within a business, and failure to overcome these disadvantages results in a lower sense of well-being on the part of the entrepreneur. Implications are drawn for theory and practice.
Publication Source (Journal or Book title)
Small Business Economics
First Page
1159
Last Page
1181
Recommended Citation
Morris, M., Soleimanof, S., Calle, M., & Tucker, R. (2025). From poverty trap to commodity trap: entrepreneurship and well-being among the poor. Small Business Economics, 65 (2), 1159-1181. https://doi.org/10.1007/s11187-025-01045-y