Reading List for My Entrepreneurship Course

2 September 2008 at 9:39 pm 6 comments

| Peter Klein |

This semester I’m teaching a new PhD seminar, “Economics of Entrepreneurship: Theory, Applications, Debate.” Here’s an excerpt from the course description. The reading list is below the fold. Comments and suggestions are welcome.

Entrepreneurship is one of the fastest-growing fields within economics, management, organization theory, finance, and even law. Surprisingly, however, while the entrepreneur is fundamentally an economic agent — the “driving force of the market,” in Mises’s (1949, p. 249) phrase — modern theories of economic organization and strategy maintain an ambivalent relationship with entrepreneurship. It is widely recognized that entrepreneurship is somehow important, but there is little consensus about how the entrepreneurial role should be modeled and incorporated into economics and strategy. Indeed, the most important works in the economic literature on entrepreneurship — Schumpeter’s account of innovation, Knight’s theory of profit, and Kirzner’s analysis of entrepreneurial discovery — are viewed as interesting, but idiosyncratic insights that do not easily generalize to other contexts and problems. . . .

This course presents a wide-ranging overview of the place of entrepreneurship in economic theory, with a special focus on applications to institutions, organizations, strategy, economic development, and related fields. It is intended for PhD students trained in economics, sociology, business administration, or a similar field (subject to instructor permission). Students are expected to be in at least their second year of their PhD program and to be working on a dissertation, or looking for a suitable dissertation topic. This is a research-oriented class in which students take an active role identifying suitable articles and topics for analysis, leading course discussions, and evaluating themselves and their peers.

Course outline and readings

General texts:

Shane, Scott. 2003. A General Theory of Entrepreneurship: The Individual-Opportunity Nexus. Cheltenham, U.K.: Edward Elgar.

Parker, Simon C. 2004. The Economics of Self-Employment and Entrepreneurship. Cambridge: Cambridge University Press.

Hébert, Robert F., and Albert N. Link. 1988. The Entrepreneur: Mainstream Views and Radical Critique. Second edition, New York: Praeger.

Acs, Zoltan J., and David B. Audretsch. 2003. Handbook of Entrepreneurship Research: An Interdisciplinary Survey and Introduction. New York: Springer.

Agarwal, Rajshree, Sharon A. Alvarez, and Olav Sorenson, eds. 2005. Handbook of Entrepreneurship Research: Disciplinary Perspectives. New York: Springer.

Weekly schedule:

Part 1: Introduction

Week 1: Introduction: occupational, structural, and functional approaches to entrepreneurship

  • Klein, Peter G. 2008. “Opportunity Discovery, Entrepreneurial Action, and Economic Organization.” Strategic Entrepreneurship Journal, forthcoming.
  • Shane, chapter 1.
  • Shane, Scott, and Sankaran Venkataraman. 2000. “The Promise of Entrepreneurship as a Field of Research.” Academy of Management Review 25: 217–26.
  • Parker, chapter 2.
  • Baumol, William J. 1968. “Entrepreneurship in Economic Theory.” American Economic Review 58: 64–71.
  • Elkjaer, Joergen R. 1991. “The Entrepreneur in Economic Theory: An Example of the Development and Influence of a Concept.” History of European Ideas 13: 805–15.

Part 2: Classic contributions to entrepreneurship theory

Week 2: Cantillon, the Physiocrats, and the British Classical School

  • Cantillon, Richard. 1755. Essai sur la nature de commerce en géneral. Henry Higgs, ed. London: Macmillan, 1931.
  • Hoselitz, Bert F. 1951. “The Early History of Entrepreneurial Theory.” Explorations in Entrepreneurial History 3: 193–220. Reprinted Joseph J. Spengler and William R. Allen, eds., Essays in Economic Thought: Aristotle to Marshall. Chicago: Rand McNally & Company, 1960, pp. 234-57.
  • Hébert and Link, chapter 1–5.

Week 3: Carl Menger and the early Austrian school

  • Menger, Carl. 1871. Principles of Economics. Auburn, Ala.: Mises Institute, 2007. Read pp. 157–74, skim the rest.
  • Hayek, F.A. 1968. “Competition as a Discovery Procedure.” New translation, Quarterly Journal of Austrian Economics 6, no. 3 (2002): 9–23.
  • Foss, Nicolai J., and Peter G. Klein. 2009. “Entrepreneurial Alertness.” In Hans Landström and Franz Lohrke, eds., The Historical Foundations of Entrepreneurship Research. Cheltenham: Edward Elgar, forthcoming.

Week 4: Schumpeter and the economics of innovation

  • Schumpeter, Joseph A. 1942. Capitalism, Socialism, and Democracy. London: Routledge, 1994. Read chapter 7, “The Process of Creative Destruction.”
  • Knudsen, Thorbjørn, and Markus C. Becker. 2003. “The Entrepreneur at a Crucial Juncture in Schumpeter’s Work: Schumpeter’s 1928 Handbook Entry Entrepreneur.” Advances in Austrian Economics 6: 199–234.
  • Knudsen, Thorbjørn, and Markus C. Becker. 2003. “Joseph A. Schumpeter: Unternehmer.” Translation. Advances in Austrian Economics 6: 235–66.
  • Acs, Zoltan J., and David B. Audretsch. 2003. “Innovation and Technological Change.” Chapter 4 of Acs and Audretsch.
  • Audretsch, David B., Max Keilbach, and Erik Lehmann. 2005. Entrepreneurship and Economic Growth. Oxford: Oxford University Press. [skim]

Week 5: Knight, entrepreneurial judgment, and the firm

  • Knight, Frank H. 1921. Risk, Uncertainty, and Profit. Boston: Hart, Schaffner, and Marx. Read chapters III.VII, III.VIII, III.IX, and III.X. Online edition here.
  • Langlois, Richard N., and Metin Cosgel. 1993. “Frank Knight on Risk, Uncertainty, and the Firm: A New Interpretation.” Economic Inquiry 31: 456–65.
  • Mises, Ludwig von. 1951. “Profit and Loss.” In Mises, Planning for Freedom. South Holland, Ill.: Libertarian Press, 1952.

Week 4: Kirzner and entrepreneurial alertness

  • Kirzner, Israel M. 1973. Competition and Entrepreneurship. Chicago: University of Chicago Press.
  • Kirzner, Israel M. 1997. “Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach.” Journal of Economic Literature 35, no. 1: 60–85.
  • Rothbard, Murray N. 1985. “Professor Hébert on Entrepreneurship.” In idem., The Logic of Action Two: Applications and Criticism from the Austrian School. Aldershott, U.K.: Edward Elgar, 1997, pp. 245–53.

Week 7: Schultz and adaptation

  • Klein, Peter G., and Michael L. Cook. 2006. “T. W. Schultz and the Human-Capital Approach to Entrepreneurship.” Review of Agricultural Economics 28, no. 3: 344–50.
  • Schultz, T. W. 1975. “The Value of the Ability to Deal with Disequilibria.” Journal of Economic Literature 13, no. 3: 827–46.
  • Schultz, T. W. 1979. “Concepts of Entrepreneurship and Agricultural Research.” Kaldor Memorial Lecture, Iowa State University, October.
  • Schultz, T. W. 1982. “Investment in Entrepreneurial Ability.” Scandinavian Journal of Economics 82, no. 4: 437–48.

Part 3: Modern perspectives and applications

Week 8: Occupational entrepreneurship: recent contributions

  • Parker, chapter 3.
  • Kihlstrom, Richard E., and Jean-Jacques Laffont. 1979. “A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion.” Journal of Political Economy 87, no. 4: 719–48.
  • Greve, Arent , and Janet W. Salaff. 2003. “Social Networks and Entrepreneurship.” Entrepreneurship Theory and Practice 28, no. 1: 1–22.
Week 9: The structural approach: causes and consequences of new-venture creation
  • Acs, Zoltan, and David B. Audretsch. 1990. Innovation and Small Firms. Cambridge, Mass.: MIT Press. [skim]
  • Xue, Jian-Hong, and Peter G. Klein. 2007. “A Latent-Variables Approach to Entrepreneurship.” Working Paper, Contracting and Organizations Research Institute, University of Missouri.

Week 10: Entrepreneurship and finance

  • Gompers, Paul, and Josh Lerner. 2001. “The Venture Capital Revolution.” Journal of Economic Perspectives 15, no. 2: 45–168.
  • Kaplan, Steven N., and Per Strömberg. 2003. “Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts.” Review of Economic Studies 70, no. 2: 281–315.

Week 11: The opportunity-discovery perspective

  • Hills, G.E., G.T. Lumpkin, and R.P. Singh. 1997. “Opportunity Recognition: Perceptions and Behaviors of Entrepreneurs.” Frontiers of Entrepreneurship Research 17: 168–82.
  • Gaglio, M., and J. A. Katz. 2001. “The Psychological Basis of Opportunity Identification: Entrepreneurial Alertness.” Small Business Economics 16: 95–111.
  • Sarasvathy, Saras D., Nicholas Dew, S. Ramakrishna Velamuri, and Sankaran Venkataraman. 2003. “Three Views of Entrepreneurial Opportunity.” Chapter 7 in Acs and Audretsch.
  • Casson, Mark C., and Nigel Wadeson. 2007. “The Discovery of Opportunities: Extending the Economic Theory of the Entrepreneur.” Small Business Economics 28, no. 4: 285–300.
  • Companys, Yosem, and Jeffery McMullen. 2007. “Strategic Entrepreneurs at Work: The Nature, Discovery, and Exploitation of Entrepreneurial Opportunities.” Small Business Economics 28, no. 4: 301–22.

Week 12: Entrepreneurship, heterogeneous capital, and the firm

  • Foss, Kirsten, Nicolai J. Foss, Peter G. Klein, and Sandra K. Klein. 2007. “The Entrepreneurial Organization of Heterogeneous Capital.” Journal of Management Studies 44, no. 7: 1165–86.
  • Foss, Kirsten, Nicolai J. Foss, and Peter G. Klein. 2007. “Original and Derived Judgment: An Entrepreneurial Theory of Economic Organization.” Organization Studies 28, no. 12: 1893–912.
  • Cook, Michael L., and Bradley Plunkett. 2006. “Collective Entrepreneurship: An Emerging Phe-nomenon in Producer-Owned Organizations.” Journal of Agricultural and Applied Economics 38, no 2: 421–28.

Week 13: The institutional environment

  • Sobel, Russell S. 2008. “Testing Baumol: Institutional Quality and the Productivity of Entrepreneurship.” Journal of Business Venturing 23, no. 6: 641–55.
  • Bjørnskov, Christian, and Nicolai Foss. 2006. “Economic Freedom and Entrepreneurial Activity: Some Cross-Country Evidence.” Working paper, Center for Strategic Management and Globalization, Copenhagen Business School.
  • Kreft, Steven F., and Russell S. Sobel. 2005. “Public Policy, Entrepreneurship, and Economic Freedom.” Cato Journal 25, no. 3: 595–616.

Week 14: Political entrepreneurship

  • Baumol, William J. 1990. “Entrepreneurship: Productive, Unproductive, and Destructive.” Journal of Political Economy 98: 893–919.
  • Schneider, Marc, and Paul Teske. 1992. “Toward a Theory of the Political Entrepreneur: Evidence from Local Government.” American Political Science Review 86: 737–47.
  • Holcombe, Randall. 1992. “Political Entrepreneurship and the Democratic Allocation of Economic Resources.” Review of Austrian Economics 15: 143–59.

Week 15: Entrepreneurial teams

  • Parker, Simon C. 2008. “The Economics of Formal Business Networks.” Journal of Business Venturing, forthcoming.
  • Cook, Michael L., Molly J. Burress, and Costas Iliopoulos. 2008. “New Producer Strategies: The Emergence of Patron-Driven Entrepreneurship.” Working paper, Department of Agricultural Economics, University of Missouri.
  • Kor, Yasemin Y. 2003. “Experience-Based Top Management Team Competence and Sustained Growth.” Organization Science 14: 707–19.

If time permits: Recent controversies

  • Alvarez, Sharon A., and Jay B. Barney. 2007. “Discovery and Creation: Alternative Theories of Entrepreneurial Action.” Strategic Entrepreneurship Journal 1, nos. 1–2: 11–26.
  • Salerno, Joseph T. 2007. “The Entrepreneur: Real and Imagined.” Working paper, Mises Institute.
  • Witt, Ulrich. 1998a. “Imagination and Leadership: the Neglected Dimension of an Evolutionary Theory of the Firm.” Journal of Economic Behavior and Organization 35: 161–77.
  • Klein, Peter G. 1999. “Entrepreneurship and Corporate Governance.” Quarterly Journal of Austrian Economics 2, no. 2: 19–42.
  • McMullen, Jeffery S. and Shepherd, Dean A. 2006. “Entrepreneurial Action and Role of Uncertainty in the Theory of the Entrepreneur.” Academy of Management Review 31, no. 1: 132–52.
  • Chiles, Todd H., Allen C. Bluedorn, and Vishal K. Gupta. 2007. “Beyond Creative Destruction and Entrepreneurial Discovery: A Radical Austrian Approach to Entrepreneurship.” Organization Studies 28: 467–93.

Entry filed under: - Klein -, Austrian Economics, Entrepreneurship, Syllabus Exchange, Teaching, Theory of the Firm. Tags: .

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6 Comments Add your own

  • 1. Josh Hall  |  3 September 2008 at 1:44 pm


    This is an excellent syllabus. I’d love to be a fly on the wall.

  • 2. Bart  |  3 September 2008 at 3:30 pm

    Have you considered looking into the influence of the concept of uncertainty? In my view something which would need (much) more conceptualization in economic theory. Take for instance this guy:
    Arrow, K.J. (1951), “Alternative Approaches to the
    Theory of Choice in Risk-Taking Situations”,
    Econometrica, Vol. 19 Nr. 4, October, p. 404-437

  • 3. Peter Klein  |  3 September 2008 at 9:11 pm

    Thanks Josh. Stop by any time for a guest lecture!

    Bart, uncertainty is an important theme throughout the course — in fact, we discussed Cantillon’s treatment of uncertainty in class today. And of course risk and uncertainty will be central when we get to Knight (1921). But we could spend more time on the Knightian construct, perhaps focusing on Richard von Mises’s distinction between “class probability” and “case probability.” I don’t know that particular Arrow piece, but will take a look.

  • 4. Bart  |  10 September 2008 at 3:23 am


    Great that uncertainty will be discussed! My hunch is that economic research into entrepreneurship will remain a cumbersome enquiry while the concept of uncertainty remains as non-descript, and well yes, ambiguous as it currently is. Also keen to hear your view on Arrow’s critique of Knight’s contention.

  • 5. Ron Towns  |  12 September 2008 at 11:42 am

    Sounds like a phenominal course. Would love to have a course like this at Columbia University. I would highly suggest you add the book “The Answer” by John Assaraf and Murray Smith to your list. Its provides a 21st century method for entrepreneurs to solve age old problems in business.

  • 6. AdamH Melbourne  |  25 February 2009 at 11:28 am

    I studied a Masters in Entrepreneurship in Melbourne, Australia. We had a large number of academic texts, but the texts that I found the most useful as a practitioner of entrepreneurship were those that had lots of case studies. The works by Professor Tom McKaskill were my favourites. I do not know the names of all the books, but they were excellent for generating discussion and real case studies.

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Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).


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