Where Do New Market Factors Come From?

37 Pages Posted: 22 Apr 2014 Last revised: 21 Apr 2020

See all articles by Per L. Bylund

Per L. Bylund

School of Entrepreneurship; Ratio Institute; Ludwig von Mises Institute

Robert Wuebker

University of Utah - David Eccles School of Business; University of St. Gallen

Date Written: April 20, 2014

Abstract

This paper offers an account of entrepreneurial factor markets where entrepreneurial action and the new firm perform an important function as a precondition to—and a creator of—new factors. Drawing from factor markets theory and the resource-based view, we argue that entrepreneurs can use the acquisition of new resources under conditions of uncertainty to generate economic profits, but in a way that does not depend entirely on alertness or luck. In this view, the entrepreneurial firm is a structure that provides the means through which new factors of production that would otherwise not be possible are brought into being. This perspective emphasizes that the advantage of the firm for entrepreneurs operating under conditions of uncertainty have more to do with the creation of a new production process than minimizing transactions costs, accelerating the discovery process, or assigning residual rights of control. Our paper contributes to a growing literature at the intersection of strategy and entrepreneurship extending factor market logic and applying it to foundational questions in entrepreneurship.

Keywords: Entrepreneurship, Austrian Economics, Resource-Based View, Strategic Factor Markets

Suggested Citation

Bylund, Per L. and Wuebker, Robert, Where Do New Market Factors Come From? (April 20, 2014). Available at SSRN: https://ssrn.com/abstract=2427141 or http://dx.doi.org/10.2139/ssrn.2427141

Per L. Bylund

School of Entrepreneurship ( email )

Oklahoma State University
424 Business building
Stillwater, OK 74078
United States
4057444301 (Phone)

HOME PAGE: http://https://business.okstate.edu/directory/bylund-per-694946.html

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Ludwig von Mises Institute ( email )

Auburn, AL
United States

HOME PAGE: http://mises.org/bylund

Robert Wuebker (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 East Campus Circle Drive
Salt Lake City, UT 84112-9304
United States

University of St. Gallen ( email )

Bodanstrasse 8
SIAW-HSG
St.Gallen, 9000
Switzerland

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