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When should entrepreneurs expedite or delay opportunity exploitation?

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  • Choi, Young Rok
  • Lévesque, Moren
  • Shepherd, Dean A.
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    Abstract

    We theorize on the performance implications of the timing at which entrepreneurs stop exploring their business opportunities and start exploiting them. Using an optimal-stopping approach, we characterize the time when exploitation should begin based primarily on when an entrepreneur's ignorance has been sufficiently reduced through knowledge accumulation. This "ignorance threshold" captures a tradeoff between the time needed to increase legitimacy and the necessity to act now to minimize competition. Changes in legitimacy and competition are based on how entrepreneurs manage their knowledge (tacit versus explicit) under differing degrees of novelty for the business opportunity. These changes, in turn, impact the performance and timing of opportunity exploitation.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Venturing.

    Volume (Year): 23 (2008)
    Issue (Month): 3 (May)
    Pages: 333-355

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    Handle: RePEc:eee:jbvent:v:23:y:2008:i:3:p:333-355

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    Web page: http://www.elsevier.com/locate/jbusvent

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    Cited by:
    1. Tischler, Joachim, 2014. "Characteristics of technological base, pace of technological development, and growth of young technology-based firms," EconStor Preprints 96156, ZBW - German National Library of Economics.
    2. Bergek, Anna & Mignon, Ingrid & Sundberg, Gunnel, 2013. "Who invests in renewable electricity production? Empirical evidence and suggestions for further research," Energy Policy, Elsevier, vol. 56(C), pages 568-581.
    3. Anokhin, Sergey & Wincent, Joakim, 2014. "Technological arbitrage opportunities and interindustry differences in entry rates," Journal of Business Venturing, Elsevier, vol. 29(3), pages 437-452.
    4. De Clercq, Dirk & Dimov, Dimo & Thongpapanl, Narongsak (Tek), 2010. "The moderating impact of internal social exchange processes on the entrepreneurial orientation-performance relationship," Journal of Business Venturing, Elsevier, vol. 25(1), pages 87-103, January.
    5. Fitzsimmons, Jason R. & Douglas, Evan J., 2011. "Interaction between feasibility and desirability in the formation of entrepreneurial intentions," Journal of Business Venturing, Elsevier, vol. 26(4), pages 431-440, July.
    6. George W. Blazenko & Andrey D. Pavlov, 2010. "Investment Timing for New Business Ventures," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 14(3), pages 37-68, Fall.
    7. Kuechle, Graciela, 2011. "Persistence and heterogeneity in entrepreneurship: An evolutionary game theoretic analysis," Journal of Business Venturing, Elsevier, vol. 26(4), pages 458-471, July.
    8. Dai, Li & Maksimov, Vladislav & Gilbert, Brett Anitra & Fernhaber, Stephanie A., 2014. "Entrepreneurial orientation and international scope: The differential roles of innovativeness, proactiveness, and risk-taking," Journal of Business Venturing, Elsevier, vol. 29(4), pages 511-524.
    9. Dirk Oberschachtsiek, 2014. "Waiting to start a business venture. Empirical evidence on the determinants," Working Paper Series in Economics 293, University of Lüneburg, Institute of Economics.

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