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Do entrepreneurial goals matter? Resource allocation in new owner-managed firms

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  • Dunkelberg, William
  • Moore, Carmen
  • Scott, Jonathan
  • Stull, William

Abstract

This paper focuses on how entrepreneurial goals affect the resource allocation of new firm owners. It connects research in psychology and management that examines the core motivations of entrepreneurs with research in economics that models the behavior of owner-managers as utility-maximizing rather than profit-maximizing. We hypothesize that new owners with nonmonetary goals allocate their resources differently than do owners with monetary goals and that the differences are meaningful in size. To test these hypotheses, we estimate firm level equations based on economic theories of input demand that show how input quantities depend on owner goals. Data come from a national survey of new U.S. business owners. We find owner goals have both a statistically and substantively significant effect on resource allocation for new firms. Owners with nonmonetary goals put in more of their own and family hours rather than hiring outside employees. Implications for research and policy are discussed.

Suggested Citation

  • Dunkelberg, William & Moore, Carmen & Scott, Jonathan & Stull, William, 2013. "Do entrepreneurial goals matter? Resource allocation in new owner-managed firms," Journal of Business Venturing, Elsevier, vol. 28(2), pages 225-240.
  • Handle: RePEc:eee:jbvent:v:28:y:2013:i:2:p:225-240
    DOI: 10.1016/j.jbusvent.2012.07.004
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    References listed on IDEAS

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    Cited by:

    1. DeTienne, Dawn R. & McKelvie, Alexander & Chandler, Gaylen N., 2015. "Making sense of entrepreneurial exit strategies: A typology and test," Journal of Business Venturing, Elsevier, vol. 30(2), pages 255-272.
    2. Mohd Hizam Hanafiah & Sh. Usman Yousaf, 2016. "The Goal Attainment and Future Direction of Business among SME Entrepreneurs," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(3), pages 5-17, JUNE.
    3. Saša Zupan Korže & Sonja Sibila Lebe, 2017. "Types of Entrepreneurs in Small Hotels in Slovenia," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 10(2), pages 129-140.
    4. repec:dug:journl:y:2016:i:3:p:5-17 is not listed on IDEAS
    5. Dimitratos, Pavlos & Buck, Trevor & Fletcher, Margaret & Li, Nicolas, 2016. "The motivation of international entrepreneurship: The case of Chinese transnational entrepreneurs," International Business Review, Elsevier, vol. 25(5), pages 1103-1113.
    6. José Ernesto Amorós & Rodrigo Basco & Gianni Romaní, 2016. "Determinants of early internationalization of new firms: the case of Chile," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 283-307, March.
    7. Strese, Steffen & Gebhard, Philipp & Feierabend, David & Brettel, Malte, 2018. "Entrepreneurs' perceived exit performance: Conceptualization and scale development," Journal of Business Venturing, Elsevier, vol. 33(3), pages 351-370.
    8. Yu-Te Liu, 2019. "Exploring the role of original aspiration in effectuation tendency," International Entrepreneurship and Management Journal, Springer, vol. 15(3), pages 977-1016, September.
    9. Watson, John & Stuetzer, Michael & Zolin, Roxanne, 2017. "Female underperformance or goal-oriented behavior?," MPRA Paper 88403, University Library of Munich, Germany.
    10. Maurizio Massaro & Filippo Zanin & Roland Bardy, 2014. "Levers of control and knowledge sharing in alliances among Large Firms and Small Firms in the pharmaceutical industry," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2014(2), pages 121-142.
    11. William Stull, 2014. "Taking the Plunge: Teaching the Microeconomics of Entrepreneurship," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(2), pages 139-150, May.
    12. repec:kap:iaecre:v:20:y:2014:i:2:p:139-150 is not listed on IDEAS
    13. Tianchen Li, 2019. "Engagement in international entrepreneurship: interactive effects of resource-based factors and institutional environments," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-17, December.
    14. Antonia Mercedes García-Cabrera & María Gracia García-Soto & Juan José Durán-Herrera, 2016. "Opportunity motivation and SME internationalisation in emerging countries: Evidence from entrepreneurs’ perception of institutions," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 879-910, September.
    15. Sirén, Charlotta & Parida, Vinit & Frishammar, Johan & Wincent, Joakim, 2020. "Time and time-based organizing of innovation: Influence of temporality on entrepreneurial firms’ performance," Journal of Business Research, Elsevier, vol. 112(C), pages 23-32.
    16. Daniela Bolzani & Maw Der Foo, 2018. "The “why” of international entrepreneurship: uncovering entrepreneurs’ personal values," Small Business Economics, Springer, vol. 51(3), pages 639-666, October.

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