The Birth, Growth and Demise of Entrepreneurial Firms
Chapter 1: The Role of Entrepreneurship and New Firm Dynamics for Economic Development
1. The role of entrepreneurship and new firm dynamics for economic development In this book we investigate the entrepreneurial processes of new firms’ emergence, growth, and eventual demise and exit in the modern knowledge intensive economy. Our interest in the knowledge intensive economy originates from contemporary entrepreneurship research moving from a view that “all forms of entrepreneurship are good” towards a more nuanced view where “high-potential entrepreneurship” is what matters for economic development (Autio & Acs, 2007; Henrekson & Johansson, 2010). Entrepreneurial activities in the knowledge intensive economy are of particular interest because they provide a link between the production of new technological knowledge and its eventual commercialization (Acs, 2002; Baumol, 2002). With this book we seek to offer an enhanced understanding of how and why firms are created, expanded, and terminated by entrepreneurs in the knowledge intensive economy. Our approach is inherently multi-level and theoretically rather eclectic: we are interested both in individual entrepreneurs’ start-up conditions and in the evolution of the firms they create; furthermore we are interested in how both social mechanisms and economic incentives shape these patterns. While most previous major research efforts have focused on the behavior, motives, and strategic actions of individual entrepreneurs, we are more interested in the “demand conditions for entrepreneurship” that facilitate such action. We acknowledge the necessity of individual action for entrepreneurship, but in empirical investigation we take such action as given and instead put emphasis on the socioeconomic demand conditions that facilitate or impede entrepreneurial action. We believe, based on an...
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