Abstract
In 2006, Israel Kirzner received the International Award for Entrepreneurship and Small Business Research prize.1 The award cemented Kirzner’s status as a leading figure in the study of entrepreneurship. It also brought at the forefront of the literature, the important contributions that the Austrian view of markets has provided and continues to provide to the field. Indeed, the last 5 years have seen a significant amount of work in entrepreneurship as well as the emergence of a new generation of scholars whose works are rooted in the Austrian tradition. While some have continued developing Kirzner’s encompassing view of the entrepreneur and entrepreneurship (for example, see works by Koppl and Minniti), others have branched out in areas such as the theory of the firm (among others see works by Klein and Foss), institutions (see Boettke and Coyne), and economic growth (see Sautet and Leeson). The purpose of this chapter is to review the most important contributions to entrepreneurship emerging from the Austrian approach and position them properly within the context of Austrian social science.
The language of alertness enables us to see with clarity that there is a single explanation for all market movements.
(Kirzner, 2009, 150)
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The International Award for Entrepreneurship and Small Business Research Prize, rinemad in 2009 “the Global Award for Entrepreneurship Research” has become firmly established as the foremost global award for research on entrepreneurship. For more details see Henrekson and Lundstrom (2009).
- 2.
Friedrich Weiser and Eugen von Böhm-Bawerk were early followers of Menger. Frederick A. Hayek and Ludwig von Mises were their students. Mises was an important influence on Hayek and the leader of the Austrian school from about 1920 to his death in 1973.
- 3.
In addition to his contribution to the Austrian theory, Mises is also the defining figure of the migration of the Austrian school from Europe to the United States. Inter-war Vienna saw the flourishing of intellectual circles, which were groups of scholars meeting regularly to discuss common interests. The Mises circle was an important one attracting economists, philosophers, and social scientists. Among them were Oskar Morgerstern, Alfred Schutz, Felix Kaufmann, Frederick von Hayek, Erich Voegelin, and Gottfried von Haberler. Another member of this illustrious group, Fritz Machlup, once mused, “I wonder whether there as ever existed anywhere a group from which so large a percentage of members became internationally recognized scholars” (Machlup as quoted in Mises, 1984, 203). The group was eventually dispersed by the dramatic events surrounding the rise of Nazism. One after the other, Hayek, Voegelin, Morgerstern, Haberler, Schutz, and many others fled to the United States. Finally, in 1940, Mises too arrived in New York. In the following years, a group of American students fell under his influence.
- 4.
The next paragraph is lifted from Minniti and Koppl (1999).
- 5.
See the introduction for Kirzner comments on this point.
- 6.
This paragraph and the next come from Minniti and Koppl (1999).
- 7.
In a recent volume, Holcombe (2007) further develops this point and provides a comprehensive discussion of the relationship between entrepreneurship and economic growth.
- 8.
For a very interesting collection of essays in the area of development and poverty see also Powell (2008).
- 9.
References
Acs, Z. J., Audretsch, D. B., Braunerhjelm, P., & Carlsson, B. 2004. The missing link: The knowledge filter and entrepreneurship in endogenous growth. CEPR Discussion paper No. 4783, Center for Economic Policy Research, London.
Aldrich, H. 1999. Organizations Evolving. London: Sage Publications.
Aldrich, H., & Fiol, M. 1994. Fools rush in? The institutional context of industry creation. Academy of Management Review, 19: 645–670.
Alvarez S. A., & Barney J. B. 2007. Discovery and creation: alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1(1–2): 33–48.
Bates, T. 1990. Entrepreneur human capital inputs and small business longevity. Review of Economics and Statistics, 72: 551–559.
Baumol, W. J. 1983. Toward operational models of entrepreneurship. In J. Ronen (Ed.), Entrepreneurship, Lexington, MA: Lexington Books.
Baumol, W. J. 1993. Formal entrepreneurship theory in economics: Existence and bounds. Journal of Business Venturing, 8: 197–210.
Baumol, W. J. 2004. Entrepreneurial enterprises, large established firms, and other components of the free-market growth machine. Small Business Economics Journal, 23(1): 9–21.
Boettke, P., Chamlee-Wright, E., Gordon, P., Ikeda, S., Leeson, P. T., & Sobel, R. 2007. The political, economic, and social aspects of Katrina. Southern Economic Journal, 74(2): 363–376.
Boettke, P., & Coyne, C. 2003. Entrepreneurship and development: Cause or consequence. Advances in Austrian Economics, 6: 67–87.
Boettke, P., & Coyne, C. 2006. Entrepreneurial behavior and institutions. In M. Minniti (Ed.), Entrepreneurship: The Engine of Growth – Volume 1 – Perspective Series. Westport, CT: Praeger Publisher – Greenwood Publishing Group.
Boettke, P. J., & Coyne, C. 2009. Context matters: Institutions and entrepreneurship. Foundations and Trends in Entrepreneurship, 5(3): 135–209.
Boland, L. A. 1982. The Foundations of Economic Methodology. London: George Allen and Unwin.
Boland, L. A. 1986. Methodology for a New Microeconomics: The Critical Foundations. Boston, MA: Allen & Unwin.
Butos, W., & Koppl, R. 1999. Hayek and Kirzner at the Keynesian Beauty Contest. Journal des Economistes et des Etudes Humaines, 9(2/3): 257–275.
Cantillon, R. 1755 (1964). Essai sur la Nature du Commerce en Général, edited with an English translation and other material by Henry Higgs. New York: Augustus M. Kelley.
Chamlee-Wright, E. 1997. The Cultural Foundations of Economic Development. London and New York: Routledge.
Choi, Y. B. 1993a. Paradigms and Conventions: Uncertainty, Decision Making and Entrepreneurship. Ann Arbor, MI: University of Michigan Press.
Choi, Y. B. 1993b. Entrepreneurship and envy. Constitutional Political Economy, 4(3): 331–347.
Choi, Y. B. 1999. Conventions and economic change: A contribution toward a theory of political economy. Constitutional Political Economy, 10(3): 245–264.
Desrochers, P., & Sautet, F. 2008. Entrepreneurial policy: The case of regional specialization vs spontaneous industrial diversity. Entrepreneurship Theory and Practice.
Earl, P. E. 2003. The entrepreneur as a constructor of connections. Advances in Austrian economics, 6: 113–130.
Foss, K., Foss, N. J., & Klein, P. G. 2007. Original and derived judgment: An entrepreneurial theory of economic rganization. Organization Studies 28(12): 1893–1912.
Foss, K., Foss, N. J., Klein, P. G., & Klein, S. 2007. The entrepreneurial organization of heterogeneous capital. Journal of Management Studies, 44:7.
Foss, N. J., & Klein, P. G. 2005. Entrepreneurship and the economic theory of the firm: Any gains from trade? In R. Agarwal, S. A. Alvarez, & O. Sorenson (Eds.), Handbook of Entrepreneurship Research: Disciplinary Perspectives: 55–80. New York: Springer.
Friedman, M. M. 1953. The methodology of positive economics. In M. Friedman (Ed.), Essays in Positive Economics. Chicago, IL: University of Chicago Press.
Gartner, W. 1990. What are we talking about when we talk about entrepreneurship? Journal of Business Venturing, 5(1): 15–28.
Gartner, W. 1985. A conceptual framework for describing the phenomenon of new venture creation. Academy of Management Review, 10: 696–706.
Gilad, B. 1982. On encouraging entrepreneurship: An interdisciplinary approach. Journal of Behavioral Economics, 11(1): 132–163.
Groundhog Day. 1993. Directed by Harold Ramis, Released by Columbia Pictures (USA).
Harper, D. 1994. A new approach to modeling endogenous learning processes in economic theory. Advances in Austrian Economics, 1: 49–79.
Harper, D. 1996. Enterpreneurship and the Market Process: An Inquiry into the Growth of Knowledge. London: Routledge.
Harper, D. 1998. Institutional conditions for entrepreneurship. Advances in Austrian Economics, 5: 241–275.
Harper, D. 2003. Foundations of Entrepreneurship and Economic Development. London and New York: Routledge.
Hayek, F. A. 1937 [1948]. Economics and knowledge. Individualism and Economic Order. Chicago, IL: The University of Chicago Press.
Hayek, F. A. 1945 [1948]. The use of knowledge in society. Individualism and Economic Order. Chicago, IL: The University of Chicago Press.
Hayek, F. A. 1952. The Sensory Order. Chicago, IL: The University of Chicago Press.
Hayek, F. A. 1967a. Studies in Philosophy, Politics and Economics. Chicago, IL: University of Chicago Press.
Hayek, F. A. 1967b. The results of human action but not of human design. Studies in Philosophy, Politics, and Economics. Chicago, IL: The University of Chicago Press.
Hayek, F. A. 1973–1979. Law, Legislation and Liberty, three volumes. Chicago, IL: The University of Chicago Press.
Hayek, F. A. 1978. Competition as a discovery procedure. New Studies in Philosophy, Politics, Economics and the History of Ideas. Chicago, IL: The University of Chicago Press.
Henrekson, M., & Lundstrom, A. 2009. The global award for entrepreneurship research. Small Business Economics, 32: 1–14.
Holcombe, R. 1998. Entrepreneurship and economic growth. Quarterly Review of Austrian Economics, 1: 45–62.
Holcombe, R. 2003. The origins of entrepreneurial opportunities. The Review of Austrian Economics, 16: 25–43.
Holcombe, R. G. 2007. Entrepreneurship and Economic Progress. London: Routledge.
Holland, J. H., Holyoak, K. J., Nisbett, R. E. & Thagard, P. R. 1986. Induction: Processes of Inference, Learning, and Discovery. Cambridge, MA: MIT Press.
Ioannides, S. 2003. The business firm as a Hybrib Hayekian order: What is the role of the entrepreneur. Advances in Austrian Economics, 6: 157–176.
Iyigun, M., & Owen, A. 1998. Risk, entrepreneurship and human capital accumulation. American Economic Review, 88: 454–457.
Kirzner, I. Forthcoming. The meaning of “Economic Goodness”: Critical comments on Klein and Briggeman. The Journal of Private Enterprise.
Kirzner, I. M. 1973. Competition and Entrepreneurship. Chicago, IL: The University of Chicago Press.
Kirzner, I. M. 1979. Perception, Opportunity, and Profit: Studies in the Theory of Entrepreneurship. Chicago, IL: University of Chicago Press.
Kirzner, I. 1982. Uncertainty, discovery, and human action: A study of the entrepreneurial profile in the Misesian system. In I. Kirzner (Ed.), Method, Process, and Austrian Economics: Essays in Honor of Ludwig von Mises, Lexingtion, MA and Toronto: Lexington Books.
Kirzner, I. M. 1992. The Meaning of Market Process: Essays in the Development of Modern Austrian Economics. London and New York: Routledge.
Kirzner, I. M. 1997. Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of Economic Literature, 35: 60–85.
Kirzner, I. M. 1999. Creativity and/or alertness: A reconsideration of the schumpeterian entrepreneur. Review of Austrian Economics, 11: 5–17.
Kirzner, I. 2009. The alert and creative entrepreneur: A clarification. Small Business Economics, 32(2): 145–152.
Kirzner, I., & Sautet, F. 2006. Mercatus policy papers. http://www.mercatus.org/PublicationDetails.aspx?id=23532.
Klein, P. 2008. Opportunity discovery, entrepreneurial action, and economic organization. Strategic Entrepreneurship Journal, 2: 175–190.
Klein, D. B., & Briggeman, J. 2009. Israel Kirzner on coordination and discovery. The Journal of Private Enterprise, 25(1): 1–53.
Knight, F. H. 1921. Risk, Uncertainty and Profit. New York, NY: Houghton Mifflin.
Koppl, R. 2000a. Policy implications of complexity: An Austrian perspective. In D. Colander (Ed.), The Complexity Vision and the Teaching of Economics, Cheltenham, UK: Edward Elgar.
Koppl, R. 2000b. The complexity vision and the teaching of economics. In D. Colander (Ed.), The Complexity Vision and the Teaching of Economics, Cheltenham, UK: Edward Elgar.
Koppl, R. 2002a. Big Players and the Economic Theory of Expectations. New York and London: Palgrave Macmillan.
Koppl, R. 2002b. What is alertness? Journal des Economists et des Etudes Humaines, 12(1): 3–13.
Koppl, R. 2003. Austrian economics and entrepreneurial studies. Advances in Austrian Economics, Vol. 6. Amsterdam: Elsevier.
Koppl, R. 2006. Entrepreneurial behavior as a human universal. In M. Minniti (Ed.), Entrepreneurship: The Engine of Growth – Volume 1 – Perspective Series. Westport, CT: Praeger Publisher - Greenwood Publishing Group.
Koppl, R. 2008. Computable entrepreneurship. Entrepreneurship Theory and Practice, 32(5): 919–926.
Koppl, R. 2009. Complexity and Austrian economics. In J. B. Rosser Jr (Ed.), Handbook on Complexity Research. Cheltenham, UK: Edward Elgar.
Koppl, R., & Minniti, M. 2008. Entrepreneurship and human action. In P. Frank, G. Shockley & R. Stough, (Eds.), Non-Market Entrepreneurship: Interdisciplinary Approaches: 10–27. Cheltenham, UK: Edgar Elgar Publishing.
Lakatos, I. 1970. Falsification and the methodology of scientific research programs. In I. Lakatos, & A. Musgrave (Eds.), Criticism and the Growth of Knowledge. Cambridge: Cambridge University Press.
Langlois, R. 2007. The entrepreneurial theory of the firm and the theory of the entrepreneurial firm. Journal of Management Studies, 44(7): 1107–1124.
Langlois, R. N. & Robertson, P. L. 1995. Firms, Markets and Economic Change, London: Routledge.
Lewin, P. 2008. The firm in disquilibrium: A market process view of firm organization and strategy. Explorations in Austrian Economics, volume 11 of Advances in Austrian Economics, Bingley, UK: JAI Press, an imprint of Emerald Group Publishing.
Lewin, P., & Phelan, S. 2000. An Austrian theory of the firm. Review of Austrian Economics, 13(1): 59–79.
Loasby, B. 1976. Choice, Complexity and Ignorance: An Enquiry into Economic Theory and the Practice of Decision-Making. Cambridge: Cambridge University Press.
McMullen, J. S., & Shepherd, D. A. 2006. Entrepreneurial action and role of uncertainty in the theory of the entrepreneur. Academy of Management Review, 31(1): 132–152.
Menger, C. 1871 [1981]. Principles of Economics. New York: New York University Press.
Minniti, M. 1999. Entrepreneurship and economic growth. Global Business and Economic Review, 11(1): 31–42.
Minniti, M. 2003. Entrepreneurship studies: A stock taking. Advances in Austrian Economics, 6: 9–37.
Minniti, M. 2004. Entrepreneurial alertness and asymmetric information in a simulated Spin-Glass Model. Journal of Business Venturing, 19(5): 637–658.
Minniti, M. 2005. Entrepreneurship and network externalities. Journal of Economic Behavior and Organizations, 57(1): 1–27.
Minniti, M., & Bygrave, W. 2001 A dynamic model of entrepreneurial learning. Entrepreneurship: Theory and Practice, 25(3): 5–16.
Minniti, M., & Koppl, R. 1999. The unintended consequence of entrepreneurship. Journal des Economists et des Etudes Humaines, 9(4): 567–586.
Minniti, M., & Levesque, M. 2010. Entrepreneurial types and economic growth. Journal of Business Venturing, 25: 305–314.
Mises, L. von. 1949. Human Action: A Treatise on Economics, New Haven, CT: Yale University Press.
Mises L. von. 1951. Profit and loss. Planning for Freedom (1952 ed.). South Holland, IL: Libertarian Press.
Mises, M. von. 1984. My Years with Ludwig von Mises (2nd ed.). Grove City, PA: Center for Futures Education, Inc.
O’Driscoll, G., & Rizzo, M. 1985. The Economics of Time and Ignorance. Oxford: Basil Blackwell.
Otani, K. 1996. A human capital approach to entrepreneurial capacity. Economica, 63:273–89.
Popper, K. 1959. The Logic of Scientific Discovery. London: Hutchinson.
Powell, B. (Ed.). 2008. Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development. Stanford, CA: Stanford University Press.
Rizzo, M. 1995. Introduction: Time and ignorance after Ten Years. In G. O’Driscoll, & M. Rizzo (Eds.), 1996. The Economics of Time and Ignorance. Routledge: London and New York. Reprint with a new introduction of the original 1985 edition, published by B. Blackwell, London.
Rosser, J. B. Sr. 1939. An informal exposition of proofs of godel’s theorems and church’s theorem. The Journal of Symbolic Logic, 4(2): 53–60.
Rotter, J. B. 1966. Generalized expectancies for internal versus external control of reinforcement. Psychological Monographs, 80(1): 1–28.
Salerno, J. T. 2008. The Entrepreneur: Real and Imagined. Quarterly Journal of Austrian Economics, 11(3–4): 187–207.
Sarasvathy, S. D. 2008. Effectuation: Elements of Entrepreneurial Expertise. Cheltenham, UK: Edward Elgar Publishing Limited.
Sarasvathy, S. D. 2001. Causation and effectuation: Towards a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2): 243–288.
Sarasvathy, S., & Dew, N. 2007. Without judgment: An empirically-based entrepreneurial theory of the firm. Working Paper, Darden School of Business, University of Virginia.
Sautet, F. E. 2000. An Entrepreneurial Theory of the Firm. London: Routledge.
Schumpeter, J. 1934. The Theory of Economic Development. Cambridge: Harvard Press.
Schutz, A. 1951 [1962]. Choosing among projects of action. Collected Papers I: The Problem of Social Reality. The Hague: Martinus Nijhoff.
Schutz, A. 1959 [1964]. Tiresias, or our knowledge of future events. Collected Papers II: Studies in Social Theory. The Hague: Martinus Nijhoff.
Shackle, G. L. S. 1972. Epistemics and Economics: A Critique of Economic Doctrines. Cambridge, UK: Cambridge University Press.
Shane, S. 2000. Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4): 448–469.
Shane, S. 2003. A General Theory of Entrepreneurship: The Individual-Opportunity Nexus. Aldershot, UK: Edward Elgar.
Shane, S., & Venkataraman, S. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1): 217–226.
Sobel, R. 2008. Testing baumol: Institutional quality and the productivity of entrepreneurship. Journal of Business Venturing, 23(6): 641–655.
Stel, A. van, Carree, M., & Thurik, R. 2005. The effect of entrepreneurial activity on national economic growth. Small Business Economics, 24(3): 311–321.
Vaughn, K. 1994. Austrian Economics in America: The Migration of a Tradition. Cambridge, UK: Cambridge University Press.
Velupillai, V. (Ed.). (2005). Computability, Complexity and Constructivity in Economic Analysis. Oxford: Blackwell.
Velupillai, V. (2007). The impossibility of an effective theory of policy in a complex economy. In M. Salzano., & D. Colander (Eds.), Complexity Hints for Economic Policy. Milan, Berlin, and elsewhere: Springer.
Witt, U. 2003. Market opportunity and the organizational grind: The two sides of entrepreneurship. Advances in Austrian Economics, 6: 135–155.
Witt, U. 2007. Firms as realizations of entrepreneurial visions. Journal of Management Studies, 44(7): 1125–1140.
Wright, M. 2001. Creating and growing wealth: Sue birley on entrepreneurship and wealth creation. Academy of Management Executive, 15(1): 37–39.
Yu, T. F. 1999. Toward a praxeological theory of the firm. Review of Austrian Economics, 12(1): 25–41.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2010 Springer Science+Business Media, LLC
About this chapter
Cite this chapter
Koppl, R., Minniti, M. (2010). Market Processes and Entrepreneurial Studies. In: Acs, Z., Audretsch, D. (eds) Handbook of Entrepreneurship Research. International Handbook Series on Entrepreneurship, vol 5. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-1191-9_9
Download citation
DOI: https://doi.org/10.1007/978-1-4419-1191-9_9
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4419-1190-2
Online ISBN: 978-1-4419-1191-9
eBook Packages: Business and EconomicsBusiness and Management (R0)