An absorptive capacity theory of knowledge spillover entrepreneurship

The knowledge spillover theory of entrepreneurship identifies new knowledge as a source of entrepreneurial opportunities, and suggests that entrepreneurs play an important role in commercializing new knowledge developed in large incumbent firms or research institutions. This paper argues that, knowledge spillover entrepreneurship depends not only on new knowledge but more importantly on entrepreneurial absorptive capacity that allows entrepreneurs to understand new knowledge, recognize its value, and commercialize it by creating a firm. This absorptive capacity theory of knowledge spillover entrepreneurship is tested using data based on U.S. metropolitan areas.     

The missing link: knowledge diffusion and entrepreneurship in endogenous growth

The intellectual breakthrough contributed by the new growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. However, endogenous growth theory does not explain how or why spillovers occur. This paper presents a model that shows how growth depends on knowledge accumulation and its diffusion through both incumbents and entrepreneurial activities. We claim that entrepreneurs are one missing link in converting knowledge into economically relevant knowledge. Implementing different regression techniques for the Organisation for Economic Co-operation and Development (OECD) countries during 1981 to 2002 provides surprisingly robust evidence that primarily entrepreneurs contributed to growth and that the importance of entrepreneurs increased in the 1990s. A Granger test confirms that causality goes in the direction from entrepreneurs to growth. The results indicate that policies facilitating entrepreneurship are an important tool to enhance knowledge diffusion and promote economic growth.     

Knowledge and entrepreneurial employees: a country-level analysis

According to the knowledge spillover theory of entrepreneurship, knowledge created endogenously results in knowledge spillovers, which allow independent entrepreneurs to identify and exploit opportunities (Acs et al. in Small Bus Econ 32(1):15–30, 2009). The knowledge spillover theory of entrepreneurship ignores entrepreneurial activities of employees within established organizations. This ignorance is largely empirical, because there has been no large-scale study on the prevalence and nature of entrepreneurial employee activities. This article presents the outcomes of the first large-scale international study of entrepreneurial employee activities. In multiple advanced capitalist economies, entrepreneurial employee activity is more prevalent than independent entrepreneurial activity. Innovation indicators are positively correlated with the prevalence of entrepreneurial employee activities, but are not or even negatively correlated with the prevalence of independent entrepreneurial activities.     

The development of an infrastructure for entrepreneurship

This paper takes a macroperspective of entrepreneurship, and focuses on the issues and events involved in constructing an industrial infrastructure that facilitates and constrains entrepreneurship. This infrastructure includes: (1) institutional arrangements to legitimate, regulate, and standardize a new technology, (2) public resource endowments of basic scientific knowledge, financing mechanisms, and a pool of competent labor, as well as (3) proprietary R&D, manufacturing, marketing, and distribution functions by private entrepreneurial firms to commercialize the innovation for profit. Although extensive research substantiates the importance of these infrastructure components, they have been treated as externalities to entrepreneurship. By incorporating these components within a single framework, one can systematically examine how various actors and functions interact to facilitate and constrain entrepreneurship.The paper makes three contributions to understanding entrepreneurship. First, I believe that the study of entrepreneurship is deficient if it focuses exclusively on the characteristics and behaviors of individual entrepreneurs, on the one hand, and if it treats the social, economic, and political factors influencing entrepreneurship as external demographic statistics, on the other hand. Popular folklore notwithstanding, the process of entrepreneurship is a collective achievement requiring key roles from numerous entrepreneurs in both the public and private sectors.Second, the paper examines how and why this infrastructure for entrepreneurship emerges. I argue that while this infrastructure facilitates and constrains individual entrepreneurs, it is the latter who construct and change the industrial infrastructure. This infrastructure does not emerge and change all at once by the actions of one or even a few key entrepreneurs. Instead, it emerges through the accretion of numerous institutional, resource, and proprietary events that co-produce each other over an extended period. Moreover, the very institutional arrangements and resource endowments created to facilitate industry emergence can become inertial forces that hinder subsequent technological development and adaptation by proprietary firms. This generative process has a dynamic history that is itself important to study systematically if one is to understand how novel forms of technologies, organizations, and institutions emerge.Finally, the paper emphasizes that the process of entrepreneurship is not limited to the for-profit sector; numerous entrepreneurial actors in the public and not-for-profit sectors play crucial roles. It motivates one to examine the different roles played by these actors, and how their joint contributions interact to develop and commercialize a new technology. This in turn makes it possible to understand how the risk, time, and cost to an individual entrepreneur are significantly influenced by developments in the overall Infrastructure for entrepreneurship. It also explains why the entrepreneurs who run in packs will be more successful than those that go it alone to develop their innovations.     

The Spirit of Entrepreneurship and the Qualities of Moral Decision Making: Toward A Unifying Framework

At the heart of entrepreneurship are imagination, creativity, novelty, and sensitivity. It takes these qualities to develop a new product or service and bring it to market, to envision the possible impacts a new product may make and come up with novel and creative solutions to problems that may arise. These qualities go to make up what could be called the spirit of entrepreneurship, a spirit that involves the ability to handle the experimental nature of entrepreunerial activity. These same qualities are crucial for moral decision making, and an ethical approach which emphasizes imagination, creativity, and has an experimental thrust is much better adapted to the entrepreneurial activity and much more relevant to the unique situations that entrepreneurs face. In this sense, the process approach to ethics developed in this article is a unifying framework that brings together the activity of entrepreneurship and moral decision making.     

The knowledge spillover theory of entrepreneurship

Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.

From grassroots to international markets: A qualitative study of marginalized entrepreneurs in India

Much of the growing literature on international entrepreneurship focuses on how positive circumstances, such as having prior international experience, business networks, or formal institutions lead to international entrepreneurial action and overlooks the role more challenging circumstances might play. In this study, we extend and refine challenge-based entrepreneurship theory to explore what influences international entrepreneurial action undertaken by marginalized entrepreneurs in an emerging economy. Despite widening economic and social disparities in emerging economies, little is known about entrepreneurs who have traditionally been “left behind.” Our findings suggest that these marginalized entrepreneurs have not only a set of liabilities but also advantages, including creative problem solving and perseverance, as well as local knowledge and networks. To spur the first-person international opportunity belief associated with international entrepreneurial action, an intermediary with resources and networks is needed to offset the liabilities. These intermediaries act as gatekeepers, helping some marginalized entrepreneurs but holding back others.     

Entrepreneurs’ creativity and firm innovation: the moderating role of entrepreneurial self-efficacy

There are several studies in entrepreneurship investigating determinants of innovation outcomes in SMEs. Although entrepreneurs’ entrepreneurial creativity is often seen as a prerequisite, previous research indicates it is not an exclusive determinant of innovation. We use theoretical logics of social cognitive theory and innovation theory to develop a conceptual model of entrepreneur’s creativity, self-efficacy, and innovation outcomes. The model is then tested on a large sample of small and medium firms from two distinct economies: the United States and Slovenia. Empirical findings partially support the proposed moderation effects of entrepreneurial self-efficacy, but with the same variations between countries. The implications of these results in relation to entrepreneurship theory and practice are discussed.     

The Role of Entrepreneurial Passion and Creativity in Developing Entrepreneurial Intentions: Insights from American Homebrewers

The study investigates the role of entrepreneurial passion and creativity as antecedents of entrepreneurial intentions, applying social cognitive theory as an underpinning framework. Specifically, this research focuses on American homebrewing, seen as a potential incubator for entrepreneurs. Results demonstrate entrepreneurial passion having a strong positive relationship with entrepreneurial intentions, even when entrepreneurial self‐efficacy is introduced as a mediator. Conversely, the relationship between creativity and entrepreneurial intentions is mediated by entrepreneurial self‐efficacy, confirming that individuals also need to feel self‐efficacious enough to pursue entrepreneurial career. The findings advance the understanding of nascent entrepreneurship phenomenon within a particular hobby context.     

How Do Risk Attitudes Differ within the Group of Entrepreneurs? The Role of Motivation and Procedural Utility

Starting a business involves risk and, thus, requires a risk‐taking attitude. The concept of risk and entrepreneurship has been widely discussed in the entrepreneurship literature; most studies compare entrepreneurs with nonentrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of the different types of entrepreneurs—those who pursue a new business because of opportunity and those who do so through necessity. This study aims to fill this gap. Our particular focus is on individuals' motivations to start their businesses and the nonmonetary returns from entrepreneurship. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, those who are motivated by creativity are more risk tolerant than other entrepreneurs. The study contributes to the literature about both risk attitudes of entrepreneurs and necessity and opportunity entrepreneurship.     

Childhood adversity and the propensity for entrepreneurship: A quasi-experimental study of the Great Chinese Famine

Studies on the determinants of entrepreneurship emphasize that challenged adults tend to become entrepreneurs. However, research has not addressed the childhood origins surrounding the propensity for entrepreneurship. This article links childhood adversity to the propensity of individuals to become migrant entrepreneurs later in life. We test hypotheses derived from this theory in the context of whether, and when, children who survived the Great Chinese Famine of 1959–1961 became migrant entrepreneurs. Results strongly indicate that those who survived greater hardship during the Famine are more likely to become entrepreneurs, especially when they were younger during the famine years. We also find that being younger at the time of migration increased the likelihood of becoming entrepreneurs in their new locale. Overall, this study casts light on why, how and when childhood adversity shapes the propensity for entrepreneurship.     

What is the value of entrepreneurship? A review of recent research

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.     

The knowledge spillover theory of entrepreneurship

According to the knowledge spillover theory of entrepreneurship, the context in which decision-making is derived can influence one’s determination to become an entrepreneur. In particular, a context that is rich in knowledge generates entrepreneurial opportunities from those ideas. By commercializing ideas that evolved from an incumbent organization via the creation of a new firm, the entrepreneur (human capital) not only serves as a conduit for the spillover of knowledge, but also for the ensuing innovative activity and enhanced economic performance through resource allocation. The knowledge spillover theory of entrepreneurship brings together contemporary theories and thoughts of entrepreneurship with prevailing theories of economic growth, geography, and strategy and therefore explains not just why some people choose to become an entrepreneur, but also why this matters significantly for the economy and society.     

Knowledge spillover entrepreneurship in an endogenous growth model

We present a model that separates entrepreneurship from profit-motivated corporate R&D aimed at improving existing production processes. Our model embeds the core idea of the knowledge spillover theory of entrepreneurship in established knowledge-based growth models by enriching their knowledge spillover structure. Introducing knowledge spillovers drives a wedge between the optimal and market allocation of resources between new knowledge creation and commercialization. We show the first best allocation depends exclusively on the relative strength of knowledge spillovers between them and derive propositions to guide policy that can bring the market equilibrium closer to this optimum.     

Academics’ start-up intentions and knowledge filters: an individual perspective of the knowledge spillover theory of entrepreneurship

Previous studies suggest that entrepreneurial activity tends to be greater in contexts where investment in new knowledge is relatively high (e.g., entrepreneurial universities). However, in this specific knowledge context, only a few academics recognize opportunities and act on them through entrepreneurial activities (e.g., spin-offs). A plausible explanation could be the existence of several filters that limit the total conversion of knowledge into economically useful knowledge. The vehicle to knowledge transfer is entrepreneurship. Therefore, the main actor is the academic entrepreneur, but no empirical study has highlighted the knowledge spillover theory of entrepreneurship at the individual level. The purpose of this paper is to explore the role of academics’ start-up intentions and knowledge filters on the knowledge transfer process within entrepreneurial university. Adopting the knowledge spillover theory of entrepreneurship and the planned behavior theory, a proposed model was tested with a sample of 207 academics enrolled in entrepreneurial universities in Spain using structural equation modeling. Our findings could provide insights for policy-makers to design policies that bring further benefits to society and educational organizations as well as significant contributions to the literature.     

Conceptualizing knowledge-based entrepreneurship networks: perspectives from the literature

Efforts to promote and support knowledge-based entrepreneurship as a vehicle for economic development are increasingly focused on the importance of networks to entrepreneurial success. This article reviews the extant empirical literature and finds a striking consensus among multiple disciplinary perspectives: not only are networks important, network characteristics also mediate resources important to entrepreneurial performance. Unfortunately, current conceptual frameworks do not adequately account for the unique nature of knowledge spillovers and their role in innovation and economic dynamism. The article suggests that scholars embrace the nascent knowledge spillover theory of entrepreneurship to guide future empirical research on entrepreneurship networks and focus intently on their impact on entrepreneurial performance—and therefore economic growth.     

The theoretical side of teaching entrepreneurship

There is an on-going debate in the entrepreneurship academy about whether we can actually teach students to be entrepreneurs. Its resolution is inextricably connected with our theoretical assumptions because they affect how and what we teach. This article is the first in a set of two contained in this issue that argues that we should develop more refined, cumulative theory and teach it to students in a way that emphasizes learning by doing, which should accelerate student mastery. This first article treats the theoretical side of teaching entrepreneurship, whereas the second addresses the pedagogical side of entrepreneurship theory.Those who advocate that entrepreneurship can be understood and taught to students assume that researchers will eventually develop a more general theory of entrepreneurship. Theory is an essential part of what we teach because we do not know any other way to help students anticipate the future, which is a key to entrepreneurial success, unless we counsel them to rely on luck or intuition. The limitation of luck and intuition is that we do not know how to teach either of them. If students could accurately anticipate the future, they could allocate their resources in the most productive manner, which would ensure their survival, satisfaction and prosperity. Despite the current limitations of our theorizing, theory still offers the most promise as course content for students.This article sides with Kuhn (1970) who argued that theory is the most practical thing that we can teach to students. Its purpose is to comment on the progress to date in developing entrepreneurship theory. It begins by analyzing the contents of 18 syllabi provided by participants at a retreat for entrepreneurship scholars. It notes a wide divergence in topics, and possible causes for this divergence, which seem to be characteristic of a developing academic discipline. It appeals for more theory in our courses and suggests questions to which entrepreneurship scholars can provide distinctive answers when compared with those offered by scholars from other disciplines.One way to add more theoretical content to entrepreneurship courses is to teach students what they ought to do, which is coded language for theory. In addition, instructors should not merely describe what entrepreneurs do, particularly in light of the observation that most of them fail and accordingly have been described as ill-fated fools. Finally, assuming that scholars can offer a more general theory of entrepreneurship, they would be able to emphasize more deductive approaches as opposed to inductive ones.These appeals for more theoretical content depend on several assumptions, which include: (1) the improbability that students can encounter circumstances that would be similar to anecdotal lessons learned in entrepreneurship school; (2) the existence of a process that can be explained theoretically; (3) studying ideal types can be discouraging to aspiring entrepreneurs if they do not fit a special profile; (4) the high failure rate among entrepreneurs makes suggesting to students that they ought to pattern their activities after them seem illogical; (5) studying average profiles, anecdotal recommendations, rules of thumb or war stories can only lead to average returns, given semi-strong information efficiency; and (6) leveraging the motivational benefits of studying successful entrepreneurs may have detrimental, unintended consequences, among others.This article notes possible causes of non-cumulative theory building and suggests several opportunities to build cumulative theory. Although it acknowledges that the field of entrepreneurship currently lacks cumulative theory, it offers a contingency approach for teaching entrepreneurship, which is actually very similar to the scientific method used by scholars to develop hypotheses about the future.     

Navigating the highs and lows of entrepreneurial identity threats to persist: The countervailing force of a relational identity with God

While an economic paradigm has been productive for entrepreneurship, religion has been proposed as an alternative rationality to advance research in our field. To extend a theological turn in entrepreneurship and identity research, our study inductively develops a conceptual model that explains how individuals navigate entrepreneurial identity threats based on the interaction between a relational identity with God (RIG) and an entrepreneurial identity to persist in entrepreneurial action. Our study suggests this can happen when entrepreneurs engage in inter-identity work mechanisms - affirming and humbling - to mitigate these identity threats. Specifically, a relational identity with God acts as a countervailing force to an entrepreneurial identity during times of identity threats to generate inter-identity meaning change, resulting in interidentity stability and entrepreneurial persistence. Through our study, we advance knowledge on the theological turn in entrepreneurship and identity by inductively developing theory on a new religious identity construct (RIG), elaborating theory of inter-identity work by shifting the focus from structural to content changes, and extending theory on entrepreneurial action, persistence, and well-being based on theological rather than economic considerations.     

Risk,balanced skills and entrepreneurship

This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not taking this possible linkage into account, previous research has underestimated the impacts of both risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates provide an illustration supporting our contention. We raise the possibility that even risk-averse people might be suited to entrepreneurship; and it may also help explain why prior research has generated somewhat mixed evidence about the effects of risk aversion on selection into entrepreneurship.