Entrepreneurship and Heterogeneous Capital

SMG Working Paper No. 3/2008

40 Pages Posted: 31 Jan 2008

See all articles by Nicolai J. Foss

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation

Peter G. Klein

Baylor University - Hankamer School of Business; Norwegian School of Economics (NHH) - Department of Strategy and Management; Ludwig von Mises Institute

Date Written: January 30, 2008

Abstract

Entrepreneurship is ultimately about the arrangement of resources into productive activities. Much of the entrepreneurship literature, however, has focused on the demand side of the market. While resource heterogeneity is a feature of many theories of the firm, such theories are not built on a systematic theory of capital. We show how the approach to capital developed by the Austrian school of economics provides a natural bridge between theory of entrepreneurship and the theory of the firm. We refine Austrian capital theory by defining capital heterogeneity in terms of subjectively perceived attributes, the functions, characteristics, and uses of capital assets. Such attributes are not given, but have to be created or discovered by means of entrepreneurial action.

Keywords: Austrian capital theory, entrepreneurship, heterogeneity, attributes

Suggested Citation

Foss, Nicolai J. and Klein, Peter G., Entrepreneurship and Heterogeneous Capital (January 30, 2008). SMG Working Paper No. 3/2008, Available at SSRN: https://ssrn.com/abstract=1089004 or http://dx.doi.org/10.2139/ssrn.1089004

SI CBS (Contact Author)

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Kilevej 14
Frederiksberg, 2000
Denmark
+45 3815 3030 (Phone)

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

Peter G. Klein

Baylor University - Hankamer School of Business ( email )

Waco, TX 76798
United States
254-710-4903 (Phone)

Norwegian School of Economics (NHH) - Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway

Ludwig von Mises Institute ( email )

Auburn, AL
United States

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