Successful Entrepreneurship
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Successful Entrepreneurship

Confronting Economic Theory with Empirical Practice

C. Mirjam van Praag

Mirjam van Praag compares and contrasts the economic theory of entrepreneurship with determinants of successful entrepreneurship derived from empirical evidence, in an attempt to discover what makes for an accomplished entrepreneur. The author’s state-of-the-art historical, theoretical and empirical research on successful entrepreneurship – all from an explicit economic perspective – comprehensively addresses questions such as: ‘What are the factors that influence individuals’ decisions to start a business venture as opposed to working as an employee?’ and ‘What are the individual characteristics that make one successful as an entrepreneur?’ thereby supporting or dispelling various existing myths. Individual factors contributing to the success of entrepreneurs that are considered include, amongst others, human capital, financial capital and psychological traits. The importance of such factors for the various phases of entrepreneurship, including start-up, delivery and performance is also measured.
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Chapter 2: Some Classic Views on Entrepreneurship

C. Mirjam van Praag


In order to solve the many problems of today both in the private and the public sectors, entrepreneurial activity on a large scale, based on a sensitive and innovative attitude, guided by a broad concept of welfare, is needed even more than before. (Heertje, 1982, p. 91) Introduction Given the importance of entrepreneurship in economic practice today, the question readily arises: what is its role in economic theory and how did it develop? In order to answer this question, I shall review some mainstream historical contributions to the theory of entrepreneurship, which started to develop halfway through the eighteenth century.1 Historically, philosophers of science did not hold entrepreneurs in high esteem. Entrepreneurs were not at all regarded as enhancing society’s wellbeing. Making a profit, the economic definition of the pecuniary return to entrepreneurship, had been perceived as robbery ever since Aristotle introduced the persistent idea of economic activity as a ‘zero-sum-game’, that is, one man’s gain is another man’s loss. Today, however, scientists and policy makers do acknowledge the importance of the entrepreneur’s role in society (see Chapter 1). Thus, economic value is created when potentially unsuccessful start-ups are prevented, or even better, when they are turned into successful ones. Moreover, potentially successful entrepreneurs who do not start, should be motivated and/or offered this opportunity in order to increase economic value. Determinants of entrepreneurial start-up and success can serve as an instrument for gaining insight into the manner in which this value can be enhanced through appropriate...

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