Where Do New Market Factors Come From?
28 Pages Posted: 22 Apr 2014 Last revised: 13 Apr 2017
Date Written: April 20, 2014
There has been increased attention to the origins of value in both entrepreneurship and strategic management. This shift in attention to value creation underscores a mismatch between theories that take resources, exchange relationships, or opportunities as given and the need to explain how new value is created. Although several streams of conceptual work inform our understanding of how economic actors organize market factors to generate economic rents, prior work is silent as to the origins of new market factors. We provide an account of entrepreneurial factor markets where, in contrast to received theory, the entrepreneurial firm performs an important function as a precondition to and a creator of new market factors. In this perspective the firm is an island of entrepreneurial innovation, which increases efficiency through increasing returns, and provides the means through which goods otherwise not possible are endogenously created by entrepreneurs through action.
Keywords: Entrepreneurship, Austrian Economics, Resource-Based View, Strategic Factor Markets
Suggested Citation: Suggested Citation