Austrian Capital Theory and the Link Between Entrepreneurship and the Theory of the Firm

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Austrian Capital Theory and the Link Between Entrepreneurship and the Theory of the Firm

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dc.contributor.author Foss, Kirsten en_US
dc.contributor.author Foss, Nicolai J. en_US
dc.contributor.author Klein, Peter G. en_US
dc.contributor.author Klein, Sandra K. en_US
dc.date.accessioned 2009-02-04T10:26:39Z
dc.date.available 2009-02-04T10:26:39Z
dc.date.issued 2005-05-02T00:00:00Z en_US
dc.identifier.isbn 8791506352 en_US
dc.identifier.uri http://hdl.handle.net/10398/7292
dc.description.abstract Several writers link entrepreneurship to asset ownership, trying to incorporate the theory of entrepreneurship into the theory of the firm. The critical link, we argue, is capital heterogeneity. Transaction cost, property rights, and resourcebased approaches to the firm assume that assets, both tangible and intangible, are heterogeneous; arranging these assets to minimize contractual hazards, to provide efficient investment incentives, or to exploit competitive advantage is conceived as the prime task of economic organization. None of these approaches, however, is based on a systematic theory of capital heterogeneity. In this paper we outline the approach to capital developed by the Austrian school of economics and integrate it into an entrepreneurial theory of the firm. We refine Austrian capital theory by defining capital heterogeneity in terms of subjectively perceived attributes, that is, the functions, characteristics, and uses of capital assets. Such attributes are not given, but have to be discovered by means of entrepreneurial action. Thinking of entrepreneurship as the organization of heterogeneous capital provides new insights into the emergence, boundaries, and internal organization of the firm, and it suggests testable implications about how and where entrepreneurship is manifested. Keywords: Entrepreneurship, heterogeneous assets, judgment, ownership, firm boundaries, internal organization. JEL Codes: B53, D23, L2 en_US
dc.format.extent 37 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;2005-005 en_US
dc.title Austrian Capital Theory and the Link Between Entrepreneurship and the Theory of the Firm en_US
dc.type wp en_US
dc.accessionstatus modt05maj02 miel en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for Industriøkonomi og Virksomhedsstrategi en_US
dc.contributor.department Institut for Ledelse, Politik og Filosofi en_US
dc.contributor.departmentshort CKG en_US
dc.contributor.departmentuk Department of Industrial Economics & Strategy en_US
dc.contributor.departmentuk Department of Management, Politics & Philosophy en_US
dc.contributor.departmentukshort IES en_US
dc.contributor.departmentukshort MPP en_US
dc.idnumber 8791506352 en_US
dc.publisher.city København en_US
dc.publisher.year 2005 en_US


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