Determinants of Successful Entrepreneurship: A Review of the Recent Literature

Abstract

This paper reviews and evaluates the academic literature on how entrepreneurial performance depends on the characteristics of entrepreneurs and entrepreneurial teams. A number of conceptual and methodological issues in the study of entrepreneurial performance are discussed. Reviews of published and unpublished work suggest that factors such as education, industry experience, managerial experience and prior entrepreneurial experience are positively associated with venture performance. There is some evidence that traits such as tenacity improve performance.

Emerging research on the role of social capital and entrepreneurial founding team composition is also reviewed. However, many of the conclusions from prior research should be treated with caution, as the literature generally is characterized by a number of methodological shortcomings. Chief among these is that most studies restrict their analyses to samples of new ventures, which makes the observed associations between variables difficult to interpret. This has important implications for both researchers and policy makers, and suggests that the study of entrepreneurial performance could benefit from the development of a rigorous and systematic research program to identify the drivers of entrepreneurial performance as a distinctive economic activity.

Keywords: Social capital, Educational background, Experience, Opportunity recognition, Occupational success, Management teams, Individual traits, Firm performance, Entrepreneurial teams