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Source: Strategic Management Journal
Resulting in 1 citation.
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Hegde, Deepak Tumlinson, Justin |
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Information Frictions and Entrepreneurship Strategic Management Journal published online (17 September 2020): DOI: 10.1002/smj.3242. Also: https://onlinelibrary.wiley.com/doi/10.1002/smj.3242 Cohort(s): NLSY79 Publisher: Wiley Online Keyword(s): Armed Forces Qualifications Test (AFQT); Cognitive Ability; Cross-national Analysis; Earnings; Educational Attainment; Entrepreneurship; NCDS - National Child Development Study (British) Permission to reprint the abstract has not been received from the publisher. Why do individuals become entrepreneurs? Why do some succeed? We propose two theories in which information frictions play a central role in answering these questions. Empirical analysis of longitudinal samples from the U.S. and the U.K. reveal the following patterns: (i) entrepreneurs have higher cognitive ability than employees with comparable education, (ii) employees have better education than equally able entrepreneurs, and (iii) entrepreneurs. earnings are higher and exhibit greater variance than employees with similar education. These, and other empirical tests support our asymmetric information theory of entrepreneurship that when information frictions cause firms to undervalue workers lacking traditional credentials, workers' quest to maximize their private returns drives the most able into successful entrepreneurship. |
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Bibliography Citation
Hegde, Deepak and Justin Tumlinson. "Information Frictions and Entrepreneurship." Strategic Management Journal published online (17 September 2020): DOI: 10.1002/smj.3242.
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