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.

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.     

Localized competition in the knowledge spillover theory of entrepreneurship

The knowledge spillover theory of entrepreneurship predicts that the relationship between new knowledge and entrepreneurial activity depends on the commercialization efficiency of incumbents. We extend the theory to contend that localized competition impedes entrepreneurial activity by reducing the incentive to exploit new knowledge, and we test this conjecture using spatial panel estimation. We find a positive relationship between new knowledge and entrepreneurial activity, which is negatively moderated by localized competition. We also find that greater agglomeration counteracts the moderating effect localized competition has on the relationship between new knowledge and entrepreneurial activity.     

The missing pillar: the creativity theory of knowledge spillover entrepreneurship

Knowledge spillover theory of entrepreneurship and the prevailing theory of economic growth treat opportunities as endogenous and generally focus on opportunity recognition by entrepreneurs. New knowledge created endogenously results in knowledge spillovers enabling inventors and entrepreneurs to commercialize it. This article discusses that knowledge spillover entrepreneurship depends not only on ordinary human capital, but more importantly also on creativity embodied in creative individuals and diverse urban environments that attract creative classes. This might result in self-selection of creative individuals into entrepreneurship or enable entrepreneurs to recognize creativity and commercialize it. This creativity theory of knowledge spillover entrepreneurship is tested utilizing data on European cities.     

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.     

A theory of serial entrepreneurship

The contribution of serial entrepreneurs to entrepreneurial activity is significant: in Europe, 18–30% of entrepreneurs are serial; in the US, their contribution is about one-eighth. Yet, theories of entrepreneurship and industry dynamics presume that all firms are launched by novice entrepreneurs and firm failure is synonymous with exit from entrepreneurship. We propose a theory of serial entrepreneurship in which an entrepreneur has three occupational choices: maintain his business in operation, shut it down to enter the labor market to earn an exogenous wage, or shut it down to launch a new venture while incurring a serial startup cost. In equilibrium, a high-skill entrepreneur shuts down a business of low quality to become a serial entrepreneur, launching and subsequently closing firms until a high quality business is found; a low-skill entrepreneur shuts down a business of low quality to enter the labor market, never to become a serial entrepreneur. A decrease in the wage or serial startup cost, or an increase in the startup capital, enhances the contribution of serial entrepreneurs to entrepreneurial activity and promotes new firm formation (by increasing entrepreneurship and the number of new firms that survive), but its effect on the exit rate of new firms is ambiguous. We show the model is consistent with evidence relating to the impact of an entrepreneur’s characteristics and prior experience in entrepreneurship on the survival of his firm and his entry into and survival in entrepreneurship.     

Patents, knowledge spillovers, and entrepreneurship

We develop an endogenous-growth model in which we distinguish between inventors and innovators. This distinction implies that stronger protection of intellectual property rights has an inverted U-shaped effect on economic growth. Intellectual property rights protection attributes part of the rents of commercial exploitation to the inventor that would otherwise accrue to the entrepreneur. Stronger patent protection will therefore increase the incentive to do research and development (R&D) and generate new knowledge. This new knowledge has a positive effect on entrepreneurship, innovation, and growth. However, after some point, further strengthening of patent protection will reduce the returns to entrepreneurship sufficiently to reduce the overall growth rate.     

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.     

Productive and harmful entrepreneurship in a knowledge economy

This paper develops an endogenous growth model with productive entrepreneurial activities and rent-seeking. Our purpose is to link contributions to the entrepreneurial and the endogenous growth literature. We deal with complementarity between productive entrepreneurship and harmful rent-seeking activities leading to potentially multiple equilibra in the economy. The degree of rent-seeking is endogenous in our model and is influenced by the economy’s legal and institutional framework as well as capital market imperfections. Policy which establishes the legal environment and financial institutions dealing with capital market imperfections together decides which of the potentially multiple equilibria is chosen by the economy. This institutional choice implies the solution to a trade-off between high economic growth on the one and a high level of productivity on the other hand.     

Corporate profit,entrepreneurship theory and business ethics

Economic profit is produced by entrepreneurs, those special individuals able to detect and seize as yet unexploited market opportunities. Many large capitalist firms manage to deliver positive profits even in the most competitive environments. They can do so, thanks to internal entrepreneurs, a subset of their employees able to drive change and develop innovation in the workplace. This paper argues that the goal of increasing economic profit is fully consistent with the corporation doing good for society. However, there is little justification for corporations to transfer the whole economic profit to shareholders. Economic agents entitled to receive the economic profit are precisely those who create this profit, namely the internal entrepreneurs.     

Theoretical milestones in international business: The journey to international entrepreneurship theory

For many decades global business was considered the preserve of large multinationals and traditional international business theory was developed to explain the behaviour of these firms. However, increasingly there is a realization that the small entrepreneurial firm has an important role to play in international business especially given that there are strong globalization pressures that both pull and push the small firm into international markets to ensure its very survival. On the questions of how and why international business takes place, several theoretical approaches have been developed that appear to run parallel to each other. However, this paper posits that the point of convergence is international entrepreneurship.     

The impact of knowledge management on innovation and entrepreneurship in the biotechnology and telecommunications industries

In the resource-based view approach, the knowledge frontier rests on the understanding of the process of creating and recreating distinctive competences. Moreover, in spite of the importance of knowledge assets, how innovation distinctive competences are generated in organizations is still an unknown factor. This research studies the effect of introducing knowledge management programs in the development of innovation distinctive competences, using two knowledge intensive industries. We establish a conceptual delimitation of knowledge management as a directive system through a set of principles and practices. The theoretical relationships we propose are tested in an empirical study carried out in 222 firms from the Spanish biotechnology and telecommunications industries.      

Formal entrepreneurship theory in economics: Existence and bounds

Theoretical analysis often can penetrate difficult economic problems in circumstances where common sense is an unreliable guide to decision making. This paper provides some new theoretical problems related to entrepreneurial decisions and behavior. For example, it investigates the optimal timing of the introduction of an innovation. Typically, in practice, innovation is a continuous process. The longer the delay in the transfer of a new product from the R&D facilities to manufacturing and marketing, the more the product is likely to be improved.But that delay also gives competitors an enhanced opportunity to get there first. This paper shows how this trade-off can be analyzed systematically, and yields some surprising results about the optimal decision on the timing of the introduction of the new product.     

Using narrative sequence methods to advance international entrepreneurship theory

Narrative sequence methods offer the potential to advance research methods and develop a common vocabulary for theory development in international entrepreneurship. While variables-focused, variance-based methods currently dominate theory development, they are atemporal, yet entrepreneurship is what entrepreneurs do over time. We examine the assumptions of variance-based approaches and compare them to those of narrative methods, which leads to a discussion of the nature of causal mechanisms. We then illustrate the use of narrative sequence methods to identify some of the mechanisms underlying the internationalisation of an intermediary in the electronic component industry, where internationalisation is interpreted as a form of innovation and entrepreneurship. We illustrate how these methods, whose value is being increasingly recognised, allow us to introduce time, timing and temporal processes into the systematic analysis of business behaviour and evolution, and to generate usable knowledge for managers and policymakers.     

"花之林"的创业之路

追求卓越花之林人文茶馆,创立于1997年7月1日,是上海最老、最著名的泡沫红茶坊之一。“花之林”前身为赫赫有名的玫瑰园(今上海花之林仙霞店),后更名为“花之林”。取“玫瑰”之“花”意,更“园”之狭义突破为“林”,即为“花之林”。中国诗词中。对     

Organizational rejuvenation for knowledge exploitation: Exploring corporate entrepreneurship in an MNE

The purpose of this paper is to study how organizational rejuvenation is used to increase and support knowledge exploitation in multinational enterprises. Using case-study data to explore the theoretical arguments, interesting findings emerge. The main finding is that entrepreneurial activities in IT industry enable organizational rejuvenation with repercussions beyond the focal function. Other findings relate to how corporate entrepreneurship activities provide possibilities for continuous knowledge exploitation within the MNE and how entrepreneurial groups inside MNEs form the foundation from which the organizational rejuvenation originates. Finally, the form of organizational rejuvenation studied embraced both structural and behavioral changes. The authors acknowledge an equal share in the development of this article.     

The social value of productive entrepreneurship

As a critical contribution to the literature on social entrepreneurship, this paper provides structure and clarity to this concept, situating it within the context of charity and philanthropy as sources of social value creation. Identifying social entrepreneurship as creating both social and economic value, we discuss productive, unproductive, and destructive entrepreneurship in terms of social value creation. To illustrate these issues comparative case studies are presented on Microsoft Corporation and Grameen Bank. Even if their successes have been derived from different motivations, these highly innovative ventures have created significant economic and social value.