This article reviews literature on the study of the cognition of entrepreneurs, and how this affects their attitudes to risk. The review begins with the heuristics and biases approach. Various decision-making biases related to over-optimism are then considered. Following this perceived self-efficacy, intrinsic motivation and intentions-based models are discussed. Some theories dealing specifically with attitudes to risk are then covered. These include prospect theory, Kahneman and Lovalo's model of risk-taking, and Das and Teng's theory of risk horizons and future orientations. Finally, the option value and information cost approach to the analysis of entrepreneurs' decision-making is discussed. Some relevant references to culture research are also given in the conclusion.
This article reviews the academic literature on corporate venture capital, that is, minority equity investments by established corporations in privately-held entrepreneurial ventures. It starts with a detailed definition of the phenomenon. An historical background of Corporate Venture Capital (CVC) is presented, followed by an extensive review of CVC investment patterns. The article then presents scholarly findings beginning with firms' objectives, through the governance of their CVC programmes and the relationships with the portfolio companies and ending with a review of corporate, venture and CVC programme performance. The article concludes with directions for future research.
Carole Howorth, Mary Rose, and Eleanor Hamilton
This article begins with an examination of definitions of family firms. The debate about what constitutes a family firm is every bit as complex as the definition of an entrepreneur. This article explores the range of definitions but shows that any definition needs to be interpreted in its economic, social, institutional, and cultural context. An explanation for the multiplicity of definitions is provided in in this article, which explores the diversity in scale, scope, organization, and longevity of family firms, and shows differences through time in different societies and between families. The article also demonstrates the strong path dependency of family firm development, with change (or lack of it) underpinned by the foundations of the past. The article further explores research which compares the performance of family firms with non-family firms and this highlights the potential policy implications of family business research.
Many excellent surveys of the literature on business growth and survival have appeared in the last decade. This article focuses on small firm literature on survival and growth, drawing on largely non-size-specific surveys only when the intersection between their subject matter and that of small firm growth and survival is significant. The focus is moreover primarily on testable or tested theories, implying a neglect of theory, however intrinsically interesting, which offers no (immediately) testable or tested implications. It is important to note at the outset that the industrial economics literature in general has a rather disparate definition of the term ‘small firm’ from the small business literature as located in the small business journals.
Marina Della-Giusta and Zella King
This article first looks at the rationale for adopting an ‘enterprise culture project’, with specific reference to the case of Britain from the 1980s to the present. It then considers how efforts to promote an enterprise culture might be evaluated, and examines some of the evidence about the impact of enterprise policies in Britain on entrepreneurial attitudes and behaviour. It then reviews some of the academic literature on ‘enterprise culture’ policy and ideology, with a wider discussion of enterprise projects and their implications.
Giovanni Ferri and Angelo Leogrande
Economic manuals and the policy debate are generally permeated by the assumption that there is an archetypical form of enterprise: the private limited company, often viewed as a public company. Instead, enterprise forms differing from the archetype are viewed as anomalous, possibly the result of unstable constructions waiting to evolve into public companies. However, reality tells us that entrepreneurial pluralism is the norm rather than the exception, and that those non-archetype enterprises do not disappear, and often thrive. Furthermore, progress in the theories of industrial organization, corporate governance, stakeholder inclusion, and the common goods all seem to suggest that entrepreneurial pluralism may be welfare enhancing. Against this background, we draw on the literature with the purpose of shedding light on the potential causes and effects of entrepreneurial pluralism. Specifically, we focus on mutual producer/consumer associations, social enterprises, co-operative enterprises, and family firms.
Geoffrey G. Jones and R. Daniel Wadhwani
Since the 1980s, entrepreneurship has emerged as a topic of growing interest among management scholars and social scientists. The subject has grown in legitimacy, particularly in business schools. This scholarly interest has been spurred by a set of recent developments in the United States. This article begins by providing a brief introduction to the origins and evolution of historical research on entrepreneurship. It then turns to explore a series of different streams of business-history research that deal with issues of entrepreneurship and historical change. The article highlights the ways in which historical context shaped the structure of entrepreneurial activity, and reveals the wide variation in organizational form and entrepreneurial behavior that historians have found. It concludes by discussing the main contributions of business history to the study of entrepreneurship, and proposes a renewed research agenda.
Deirdre Tedmanson and Caroline Essers
This chapter extends on existing critical entrepreneurship contributions to illustrate and analyse how diversity entrepreneurship stemming from diverse contexts can enhance understandings of entrepreneurship as a socially and culturally constructed phenomenon. The chapter first explores the perspectives of Indigenous entrepreneurs in Australia, and second the diverse experience of female Turkish entrepreneurial ‘others’ in both the UK and the Netherlands. Exploring the different roles played by different national contexts in shaping entrepreneurial agency and resistance, rich case study material is used to illustrate how diversity can assist minority entrepreneurs while at the same time also constraining opportunity. The chapter reveals how new takes on entrepreneurship in different locations and settings can reveal not only new forms of entrepreneurial diversity, but also the increasing diversity of how (and what) entrepreneuring can mean.
Douglas Michael Wright and Andrew Burrows
This article takes a broader perspective that encompasses both traditional agency-based explanations of buy-outs as well as recognizing the buy-out phenomenon as a vehicle for entrepreneurial innovation. Although early studies suggested that buy-outs involved both agency cost reduction and entrepreneurial aspects, they did not formally conceptualize these two approaches. The agency theory approach conceptualizes buy-outs as a tool that facilitates cost efficiencies. The entrepreneurial perspective sees buy-outs as a means for implementing new innovations and strategic change that enable fuller exploitation of firm resources that may have been blocked by prior ownership arrangements, such as being part of a large diversified firm or a privately-owned firm with leadership succession problems. The article first elaborates the definitions and sources of buy-outs. Secondly, it reviews theoretical perspectives relating to buy-outs, notably the agency approach and an entrepreneurial perspective which draws on the theory of entrepreneurial cognition. The third main section reviews a model to explain different types of buy-out drawing on these two perspectives. The fourth section reviews studies of the effects of buy-outs, identifying evidence consistent with agency and entrepreneurial views of buy-outs. The final section provides discussion and conclusions.
Entrepreneurship and marketing are intimately related. This article examines their relationship from three perspectives, the market process perspective, the marketing perspective, and the perspective of the entrepreneurial firm. These provide complementary insights into the connections between the two concepts. The article briefly considers definitions of entrepreneurship and marketing. It then discusses the three complementary perspectives in turn. The final section provides a summary and identifies areas for further research.
Markus Reihlen and Andreas Werr
Research on entrepreneurship in professional services is rather limited. The authors argue that one reason why the two fields of professional services and entrepreneurship have operated in isolation rather than in mutual interaction is an inherent contradiction between the very ideas of entrepreneurship and professionalism. The perspective on entrepreneurship for this chapter is rather broad, focusing on new venture management and renewal in Professional Service Firms as well as embracing aspects such as learning, innovation, and institutional change. The chapter reviews previous work on entrepreneurship in professional services from three levels of analysis—the entrepreneurial team, the entrepreneurial firm, and finally the organizational field within which the creation and exploitation of entrepreneurial opportunities take place.
Francis J. Greene and David J. Storey
This article aims to review the extent to which public policy can enhance entrepreneurship and so garner the economic benefits identified by van Praag and Versloot. To achieve this aim the article has four sections. It begins by addressing the conceptual confusion caused by the different definitions of “entrepreneurship and small business (public) policy.” Following Hart, it takes “public policy” to be the intended use of powers by government to impact on societal outcomes. It then follows Lundstrom and Stevenson and suggests that entrepreneurship policies focus upon individuals who are not yet business owners; here the policy objective is to shift them into becoming business owners. In contrast, small business or “small and medium sized enterprise” (SME) policies focus upon existing businesses.
Saul Estrin, Klaus E. Meyer, and Maria Bytchkova
This article examines the opportunities and constraints for entrepreneurship offered by the evolving institutional environment and the characteristics of the people who stepped up to the challenge. It places the concept of entrepreneurship in a transition context, before identifying in the third section the unique features of entrepreneurship in transition economies. The article discusses the evolving business environment, and reports the scale and nature of entrepreneurship in transition economies. The personal characteristics and the business strategies of entrepreneurs in transition economies are also discussed. The article concludes by outlining directions for future work.
David B. Audretsch and Max Keilbach
The purpose of this article is to suggest that a more recent literature has emerged which identifies how and why entrepreneurship in the form of new and small firms is a driving engine of industrial restructuring and economic growth. The starting point of this literature is the consideration of entrepreneurial opportunities and how they relate to opportunities generated by incumbent corporations. Entrepreneurship is distinguished from incumbent organizations with respect to both opportunity creation and exploitation. According to the ‘Knowledge Spillover Theory of Entrepreneurship’, entrepreneurial opportunities are not exogenous to the economy, but rather systematically created by incumbent organizations investing in new knowledge and ideas but unable to fully commercialize that new knowledge.
Simon C. Parker
This article surveys the entrepreneurship literature as it relates to the labour market. The purpose of this article is to describe, from a mainly but not exclusively economic perspective, the principal theoretical methods and empirical findings in the field. Entrepreneurship intersects with labour markets in several other ways. For example, human capital theory can be used to help explain entrepreneurs' business performance; and labour supply models can be used to help understand their work effort patterns. Both topics attract policy interest, because policy-makers frequently express interest in promoting successful enterprises, and fostering an ‘enterprise culture’ in which hard work is encouraged and rewarded. Policy-makers also promote entrepreneurship because they believe it creates employment growth and reduces unemployment.
Luca Berchicci and Christopher L. Tucci
This article reviews the literature on the (lack of) innovativeness of incumbents both in creating new products and entering new markets. It then presents some non-anecdotal evidence as counter-argument to the alleged curse of incumbency. First, it uses as illustration a cross-sectional study by Chandy and Tellis of a large number of radical product innovations. Secondly, it explores to what extent the story of incumbents' inability to enter new markets matches the history of the computer rigid hard drive industry. This industry is particularly suited to this analysis since its technological generational changes have been described by scholars as ‘radical’ and ‘disruptive,’ and because its history served to inspire Christensen's recent theories.
J. S. Metcalfe
This article suggests that an evolutionary market perspective provides a powerful framework for bringing the entrepreneur back into economic theory precisely because enterprise is the activity of introducing new activities, production methods and products into an economy. Economic variation is the prerequisite for economic transformation and development and this is why enterprise and the entrepreneur are central components of the evolutionary approach to economics. Indeed, the fundamental historical fact about capitalism is its internal capacity for transformation, and the corresponding transience of the activities and ways of life that it supports within a more slowly evolving set of institutions. Economists have for a long time recognized a capitalist, market economy as a self-organizing system sustaining a spontaneous order; far less well recognized is its capacity for spontaneous transformation, and it is this theme that forms the core of this article.
Michael Lenox and Jeffrey G. York
This article explores the existing literature of the three main classes of drivers: economic incentives, personal motivations, and institutional context. It reviews the existing theories and provides linkages to empirical evidence when possible. It then turns to the future of the field and determines several gaps in the literature. There is a positive relationship between sustainability orientation and entrepreneurial which disappears as participants gain greater business education and experience. Researchers in environmental entrepreneurship have not necessarily relied on research in entrepreneurship to build studies on motivation. Social entrepreneurship refers to entrepreneurial ventures with an explicit social mission. The growing research stream strongly shows that the regulatory and societal surroundings must be taken into account in studying environmental entrepreneurship. Finally, potential directions for future research are explained.
This article reviews the existing theoretical and empirical literature on ethnic entrepreneurship. It primarily focuses on empirical research conducted in Britain and the United States. It examines the definition of ethnic entrepreneurship and evaluates the forces affecting entry into ethnic entrepreneurship, entrepreneurial survival and success, as well as the factors underlying the heterogeneity in entrepreneurial behaviour and performance among ethnic minority groups.
David J. Storey
This article is primarily focused on further developing the theme of the political economy way of evaluating the impact of Small and Medium-sized Enterprise (SME) policies. It reaches five key conclusions. First, that evaluation needs to become more central to the policy-making process. Evaluation should not be undertaken solely as a historic accounting exercise to determine whether public money has been spent wisely, although that role is of value. Instead of being, ‘at the end of the line’, evaluation should be used to inform current policy, so that current objectives and targets may be modified in the light of evidence of policy effectiveness. Hence considerations of how policy is evaluated should therefore be incorporated into policy formulation when new ideas are being developed. They could even influence the choices made by governments about how best to engage with SMEs. Specifically, evaluation has to be incorporated as a key element in policy development.