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Revealing Entrepreneurial Talent

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  • Francesco Ferrante

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Abstract

A society’s allocation of working time to entrepreneurial, organizational and learning activities is the main factor behind technical change and economic growth. Building on Lucas (1978) and Kihlstrom and Laffont (1979), in this paper I offer evidence that the amount of working time spent by small business owners in entrepreneurial activities affects the performance of the business and reveals their entrepreneurial talent. The intuition is that it is reasonable to allocate more of our time to those activities where we realize we are more productive. As actual consumption choices reveal consumer preferences, the varying entrepreneurial content of the activities performed is a signal of an individual’s ability as entrepreneur. The results obtained suggest that the allocation of working time by small business owners: (a) throws light on their behavioral patterns; (b) is related to the owner’s human capital and to firm size; and (c) has a significant correlation with business performance. The main finding of my analysis, confirming previous studies on this topic, is that education is an important part of entrepreneurial human capital. Moreover, the latter is the main factor that can sustain small firms’ competitiveness in a globalizing economy. The entrepreneur is at the same time one of the most intriguing and one of the most elusive characters in the cast that constitutes the subject of economic analysis (Baumol, 1965, p. 64). Copyright Springer 2005

Suggested Citation

  • Francesco Ferrante, 2005. "Revealing Entrepreneurial Talent," Small Business Economics, Springer, vol. 25(2), pages 159-174, September.
  • Handle: RePEc:kap:sbusec:v:25:y:2005:i:2:p:159-174
    DOI: 10.1007/s11187-003-6448-6
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    File URL: http://hdl.handle.net/10.1007/s11187-003-6448-6
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    References listed on IDEAS

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    1. David B. Audretsch & Roy Thurik, 2001. "Linking Entrepreneurship to Growth," OECD Science, Technology and Industry Working Papers 2001/2, OECD Publishing.
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    Cited by:

    1. de Bruin Anne M. & Ferrante Francesco M., 2011. "Bounded Opportunity: A Knowledge-Based Approach to Opportunity Recognition and Development," Entrepreneurship Research Journal, De Gruyter, vol. 1(4), pages 1-23, October.
    2. Gupta, Himanshu & Barua, Mukesh Kumar, 2016. "Identifying enablers of technological innovation for Indian MSMEs using best–worst multi criteria decision making method," Technological Forecasting and Social Change, Elsevier, vol. 107(C), pages 69-79.
    3. Ferrante, Francesco & Supino, Stefano, 2014. "Le misure di sostegno alla nuova imprenditorialità. Le buone pratiche su scala europea, con particolare riferimento all’educazione imprenditoriale
      [Supporting early-stage entrepreneurship]
      ," MPRA Paper 68930, University Library of Munich, Germany.
    4. Salisu Isyaku, 2014. "Mediating Effect of Uncertainty Avoidance on the Relationship between Entrepreneurial Talent and SMEs Performance in Nigeria: A Conceptual Analysis," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(6), pages 368-383, June.
    5. repec:nea:journl:y:2017:i:33:p:12-27 is not listed on IDEAS
    6. Ferrante, Francesco & Federici, Daniela & Parisi, Valentino, 2017. "University Students and Entrepreneurship. Some insights from a population-based survey," MPRA Paper 76980, University Library of Munich, Germany.
    7. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
    8. Ferrante, Francesco & Sabatini, Fabio, 2007. "Education, social capital and entrepreneurial selection in Italy," MPRA Paper 2451, University Library of Munich, Germany.
    9. Deniz Ucbasaran & Paul Westhead & Mike Wright, 2008. "Opportunity Identification and Pursuit: Does an Entrepreneur’s Human Capital Matter?," Small Business Economics, Springer, vol. 30(2), pages 153-173, February.
    10. Mayer-Haug, Katrin & Read, Stuart & Brinckmann, Jan & Dew, Nicholas & Grichnik, Dietmar, 2013. "Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs," Research Policy, Elsevier, vol. 42(6), pages 1251-1273.
    11. repec:eee:touman:v:45:y:2014:i:c:p:115-123 is not listed on IDEAS

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