Posts filed under ‘Entrepreneurship’
A False Dichotomy?
| Steve Phelan |
John Mathews recently sent me a conference paper on Kirznerian, Schumpeterian, and Ricardian approaches to entrepreneurial dynamics.
Aside from questioning the resource-based theory of entrepreneurship, the paper also attempts to resolve the Kirznerian/Schumpeterian schism in entrepreneurship — namely whether entrepreneurs drive the economy towards equilibrium (Kirzner) or disequilibrium (Schumpeter). (more…)
Rent and Quasi-Rent
| Steve Phelan |
In a recent paper in the Journal of Business Venturing, Sharon Alvarez attempts to construct a theory of entrepreneurship and the firm. The central question is why new resource combinations are sometimes carried out by entrepreneurs starting new ventures rather than within established firms. (more…)
Entrepreneurship and Dyslexia
| Steve Phelan |
Strange story in the NY Times on Dec 6 (HT: Freakanomics).
Some of the highlights:
The report, compiled by Julie Logan, a professor of entrepreneurship at the Cass Business School in London, found that more than a third of the entrepreneurs she had surveyed — 35 percent — identified themselves as dyslexic.
And…
“Entrepreneurs are hands-on people who push a minimum of paper, do lots of stuff orally instead of reading and writing, and delegate authority, all of which suggests a high verbal facility,” Mr. Dennis said. “Compare that with corporate managers who read, read, read.”
Indeed, according to Professor Logan, only 1 percent of corporate managers in the United States have dyslexia.
I guess we can call this a compensatory theory of entrepreneurship. Professors are doomed as readers, too, I guess.
New Paper on Law and Entrepreneurship
| Peter Klein |
Gordon Smith and Darian Ibrahim’s paper “Entrepreneurs on Horseback: Reflections on the Organization of Law,” is up on SSRN. The paper surveys the emerging field of law and entrepreneurship and urges legal scholars to pay closer attention to the entrepreneurship literature. “In making our case, we argue that research at the intersection of entrepreneurship and law is distinctive. In some instances, legal rules and practices are tailored to the entrepreneurial context, and in other instances, general rules of law find novel expression in the entrepreneurial context.”
(The paper’s title alludes to an inside joke about the mythical “law of the horse,” a hyper-specialized branch of legal theory no serious law school would include in its curriculum. Law and entrepreneurship, in other words, is not quite as silly as the law of the horse.)
Financial Innovation
| Steve Phelan |
In his recent NY Times op-ed, Paul Krugman railed against the evils of financial innovation:
How did things get so opaque? The answer is “financial innovation” — two words that should, from now on, strike fear into investors’ hearts.
O.K., to be fair, some kinds of financial innovation are good. . . . But the innovations of recent years — the alphabet soup of C.D.O.’s and S.I.V.’s, R.M.B.S. and A.B.C.P. — were sold on false pretenses. They were promoted as ways to spread risk. . . . What they did instead — aside from making their creators a lot of money, which they didn’t have to repay when it all went bust — was to spread confusion, luring investors into taking on more risk than they realized.
Folsom’s (1991) “Myth of the Robber Barons” contrasts “political entrepreneurs,” who basically engage in rent-seeking, from “market entrepreneurs,” who seek entrepreneurial rents and improve social welfare. (HT: Rafe Champion.) I’m wondering if we need a new category of entrepreneurs?
(more…)
Shane Seminar in Entrepreneurship
| Peter Klein |
Scott Shane’s PhD seminar in entrepreneurship takes place twice this summer, 23-27 June and 4-8 August 2008. Two of my PhD students have gone in recent years and each came back with a glowing report. (I wouldn’t mind seeing some of these papers on the reading list, but hey, nobody’s perfect!)
Fundamental Questions About Organizations
| Peter Klein |
Our most popular tag here at O&M seems to be ephemera, but occasionally we write a “big think” post (e.g., this one). Today I’ll offer another. A colleague recently asked me to write down, for a research project we’re sketching out, some “fundamental questions about organizations.” He wanted my off-the-cuff response, not a carefully crafted set of ideas. Here’s what I came up with:
1. Does organizational form matter? How much does it really affect performance, however measured? Organizational form might not be that important because (a) its effects on performance are small relative to the performance effects of technical or allocative efficiency; (b) organizational form is easily changed and always chosen optimally to fit the circumstances; or (c) organizational form is merely a legal distinction without any economic significance. (more…)
JMS Special Issue on the Entrepreneurial Theory of the Firm
| Peter Klein |
In the Spring of 2005 I attended a terrific workshop on “The Entrepreneurial Theory of the Firm,” organized by Sharon Alvarez and Jay Barney and held at Ohio State University. Participants included Mark Casson, Dick Langlois, Sid Winter, Ulrich Witt, Ivo Zander, Simon Parker, Todd Zenger, Steve Michael, Bill Schultze, and several others. The papers and discussions explored a variety of approaches for linking the theory of entrepreneurship to the economic and strategic theory of the firm, a subject near and dear to our hearts here at O&M.
The workshop papers have now been published as a special issue of the Journal of Management Studies (volume 44, number 7, November 2007), edited by Sharon and Jay. A special contribution from Brian Loasby, who wasn’t able to attend the workshop, is included. And don’t miss this paper from an unusually structured joint-spousal team.
Langlois on McCraw on Schumpeter
| Peter Klein |
Former O&M guest blogger Dick Langlois reviews Thomas McCraw’s Schumpeter biography, Prophet of Innovation, for EH.Net.
McCraw is at his best in conveying Schumpeter the man, providing an engaging and beautifully written portrait of this larger-than-life and often tragic figure. McCraw also works hard at weaving Schumpeter’s economics into the life story and at making the ideas supply their share of the drama. The result deepens our understanding of a fascinating and complex man and of the difficult times in which he lived, even if it does not necessarily sharpen our understanding of his economics or add much that is new to his biography.
See also our previous comments on McCraw and Schumpeter more generally.
Hoselitz Bleg
| Peter Klein |
Can anyone point me to biographical or bibliographical resources on Bert F. Hoselitz? He is known to Austrian economists as the translator (with James Dingwall) of Menger’s Principles of Economics, but he was also an accomplished Chicago development economist who founded the journal Economic Development and Cultural Change. He was trained in Vienna (according to this brief note) but did not apparently have much contact with the Austrian school. I’m particularly interested in Hoselitz’s contributions to entrepreneurship theory.
Hayek and Entrepreneurship
| Peter Klein |
At the Kauffman data symposium participants were given little notebooks with the Kauffman logo and a quote from Hayek — “Society’s course will be changed only by a change in ideas” — on the cover. It’s a nice line and certainly in the spirit of Hayek’s views on social change as expressed in The Road to Serfdom, “The Intellectuals and Socialism,” and other works, though the exact quotation does not seem to appear in Hayek’s writings. (The line is attributed to Hayek by John Blundell, recounting a conversation between Hayek and IEA founder Antony Fisher. In “The Rediscovery of Freedom,” written in 1983, Hayek puts it this way: “A young English pilot who had returned from the war and had made a great deal of money in a few years as an entrepreneur came to me [around 1947] and asked me what he could do to thwart the ominous growth of socialism. I had considerable trouble persuading him that mass propaganda was futile and that the task consisted rather of convincing intellectuals.”)
The Kauffman Foundation focuses on entrepreneurship, not opposition to socialism, so I started thinking about the influence of Hayek on entrepreneurship research. Kirzner’s theory of entrepreneurial discovery builds directly on Hayek’s notion of an economy characterized by dispersed, tacit knowledge, an economy in which “competition” is a process of coordination and equilibration, rather than a set of conditions (as in Walrasian competitive general equilibrium). However, Hayek did not develop a theory of the entrepreneur per se. (more…)
Kauffman Symposium on Entrepreneurship Data
| Peter Klein |
I head to Kansas City today for the Kauffman symposium on entrepreneurship and innovation data, where Mike Sykuta and I will give a presentation on the CORI contracts library. Descriptions of all the data sets to be presented are available at SSRN.
I’m curious to see how the participants will address the issues of measurement and definition that are particularly thorny in entrepreneurship research.
Reflections on the McQuinn Entrepreneurship Conference
| Peter Klein |
Last week’s McQuinn Center conference on entrepreneurship in Kansas City was a great success, with some 75 participants from places like Nepal, Norway, the UK, and Peru as well as the US and Canada. Keynoters Cornelia Flora, Pierre Desrochers, Sandy Kemper, and Randy Westgren challenged and inspired the group and the papers and discussions highlighted a variety of innovative entrepreneurship research topics, theories, and methods. Papers and presentations are now available on the conference website.
I had the pleasure of offering introductory and closing remarks, and I’ll share here some reflections about the state of the field and suggestions for moving forward. (more…)
Call for Papers: Entrepreneurship — Strategy and Structure
| Peter Klein |
The Journal of Economics and Management Strategy, founded and edited by Dan Spulber, seeks papers for a special issue on “Entrepreneurship: Strategy and Structure.” Thomas Hellmann and Scott Stern are editing the special issue.
While submissions from a wide range of perspectives and topics are welcome, we specifically invite theoretical and empirical papers on the following:
- The sources of value creation by entrepreneurial ventures
- Game-theoretic approaches to the organization of new firms, and the impact of entrepreneurs on market outcomes
- The determinants of entrepreneurial activity across industries and locations
- The determinants and consequences of the structure of entrepreneurial finance
- The impact of formal and informal networks (including strategic alliances) on the structure and conduct of entrepreneurial firms
- The impact of innovation policy, including intellectual property rights policy, the tax system, and the legal system, on the formation and strategic impact of new ventures
Here are the submission guidelines. Deadline is 15 November 2007.
World Freedom Atlas
| Peter Klein |
Here is a terrific resource: the World Freedom Atlas, a “geovisualization tool” — i.e., cool interactive map — for world statistics. It includes the most important variables used by economists including income and purchasing power from the Penn World Table, legal origin from LLSV, economic freedom from the Fraser Institute and the Heritage Foundation, policy constraints from Witold Henisz, the World Bank’s governance indicators, and a host of other variables from Acemoglu, Johnson and Robinson; Barro and Lee; Easterly and Levine; Persson and Tabellini; and several others. All that’s missing is links to the original datasets. Still, an impressive tool. (HT: Mike Kellermann)
Crowdfarming
| Peter Klein |
We use crowds to predict things and even to make stuff. Why not use them to generate electricity? (Harmlessly, not like this.)
Mises and Mises (and Knight and Hoppe) on Probability
| Nicolai Foss |
O&M has featured a number of posts on uncertainty as a phenomenon that, in some sense, goes beyond risk. Contributors to these kind of discussions often delight in employing notions such as “Knightian uncertainty,” “genuine, real, true . . . uncertainty,” “the unlistability problem,” “surprise functions,” etc., and they debate whether so-called Knightian uncertainty really is inconsistent with a Bayesian perspective, whether Shackle’s notion of uncertainty is in some sense deeper than Knight’s, etc.
Much of the debate is, if perhaps not a quagmire, then certainly an area where conceptual clarification and some serious formal work would seem to be much needed (with respect to the latter, see this). Conceptual clarification may occasionally involve going back to important figures in the debates and consider what they (really) said. (more…)
The Political Economy of Entrepreneurship
| Peter Klein |
Entrepreneurship and political economy are two of the fastest-growing fields in applied economics, so it is only natural that they come together. Magnus Henrekson and Robin Douhan have a new volume coming out in the International Library of Entrepreneurship Series, The Political Economy of Entrepreneurship (Elgar, 2007). It contains reprints of classic and contemporary papers by Schumpeter, Kirzner, Baumol, Stigler, de Soto, Acemoglu, Lerner, and many others.
Henrekson and Douhan identify in their introduction (which you can read here) three key aspects of entrepreneurship as it relates to political economy: (more…)
Knightian Uncertainty Workshop
| Peter Klein |
The authors of this blog find Knightian uncertainty a useful concept for understanding both entrepreneurship and the economic theory of the firm (e.g., here and here). So we were pleased to learn about a workshop on Knightian uncertainty organized earlier this month at Columbia University by and Daniel Beunza David Stark. Nassim Taleb was there, as were Douglass North, Anna Grandori, Bruce Kogut, Adam Branderburger, and others well known to readers of this blog. Buenza summarizes the discussion and offers some commentary at the Socializing Finance blog.
One problem with the treatment of Knightian uncertainty in the management literature (not necessarily in the presentations above) is that the concept itself is not always defined precisely and consistently. Terms like Knightian uncertainty, radical uncertainty, case probability, complexity, ambiguity, and plain old uncertainty are often used interchangeably. Sometimes what is meant is ignorance of the relevant probability distributions. Sometimes it is ignorance of one’s own ignorance. Sometimes it means simply the lack of common (Bayesian) priors. To move forward, more clarity is surely needed.
Corporate Venturing
| Peter Klein |
Here are presentation slides from a 2007 Academy of Management Professional Development Workshop (PDW) on corporate venturing. The presenters were Gary Dushnitsky, Thomas Keil, Riitta Katila, Suresh Kotha, Michael Lenox, Markku Maula, Corey Phelps, Shaker Zahra, and Rosemarie Ziedonis.
Don’t forget that slides from our PDW on Austrian economics are available as well.
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