Dispersed knowledge and an entrepreneurial theory of the firm [An article from: Journal of Business Venturing]

This digital document is a journal article from Journal of Business Venturing, published by Elsevier in 2004. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
In this article, we propose an entrepreneurial theory of the firm that is based on dispersed knowledge. We argue that the dispersion of knowledge over people and places and over time leads to uncertainty. This uncertainty, combined with heterogeneous expectations and the nexus of an individual and opportunity, explains the emergence of new firms. We then suggest that the theory of the firm proposed by us answers questions that have been overlooked by alternative theories. The specific question we discuss in this article is when and why an entrepreneurial opportunity will be taken to market through an existing firm, and when and why a new firm will be chosen as a vehicle for taking a new idea to market, i.e., whether the residual will be concentrated in an existing or in a new firm.