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Entrepreneurial entry thresholds

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  • McCann, Brian T.
  • Folta, Timothy B.

Abstract

Much of prior research recognizes that entry into entrepreneurship involves a comparison of expected economic returns in a venture to some threshold level of acceptable performance. Despite this recognition, theory commonly focuses on drivers of economic returns at the exclusion of threshold drivers. Moreover, typical empirical investigations of entry provide little insight into whether determinants influence expected returns, the required threshold, or both. Drawing from the Panel Study of Entrepreneurial Dynamics, we apply an empirical approach new to the entrepreneurial entry literature to investigate the drivers of both expected performance and the unobserved threshold, providing greater insight into the specific causal role of entry determinants.

Suggested Citation

  • McCann, Brian T. & Folta, Timothy B., 2012. "Entrepreneurial entry thresholds," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 782-800.
  • Handle: RePEc:eee:jeborg:v:84:y:2012:i:3:p:782-800
    DOI: 10.1016/j.jebo.2012.09.020
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    Cited by:

    1. Rocha, Vera & Carneiro, Anabela & Amorim Varum, Celeste, 2015. "Serial entrepreneurship, learning by doing and self-selection," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 91-106.
    2. Richard A. Martina, 2020. "Toward a theory of affordable loss," Small Business Economics, Springer, vol. 54(3), pages 751-774, March.
    3. Dmitri Knatko & Galina Shirokova & Karina Bogatyreva, 2016. "Industry choice by young entrepreneurs in different country settings: the role of human and financial capital," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(4), pages 613-627, July.
    4. Dubard Barbosa, Saulo & Fayolle, Alain & Smith, Brett R., 2019. "Biased and overconfident, unbiased but going for it: How framing and anchoring affect the decision to start a new venture," Journal of Business Venturing, Elsevier, vol. 34(3), pages 528-557.
    5. Klyver, Kim & Steffens, Paul & Lomberg, Carina, 2020. "Having your cake and eating it too? A two-stage model of the impact of employment and parallel job search on hybrid nascent entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(5).
    6. Takanori Adachi & Takanori Hisada, 2017. "Gender differences in entrepreneurship and intrapreneurship: an empirical analysis," Small Business Economics, Springer, vol. 48(3), pages 447-486, March.
    7. Laffineur, Catherine & Dubard Barbosa, Saulo & Fayolle, Alain & Montmartin, Benjamin, 2020. "The unshackled entrepreneur: Occupational determinants of entrepreneurial effort," Journal of Business Venturing, Elsevier, vol. 35(5).

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    More about this item

    Keywords

    Thresholds; Nascent entrepreneurs; Expectations; Entry;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models

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