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