Muppets and Gazelles: rooting out ideological and methodological biases in entrepreneurship research

Paul Nightingale, Alex Coad
Work package: 
WP 8
Publication number: 
01 September 2011

Abstract: Despite an almost universally accepted belief that entrepreneurial activity is a positive driving force of the economy the accumulated evidence remains inconclusive. The paper positions interest in entrepreneurship within its historical context and highlights the significant ideological and methodological problems with its analysis. Taking these problems into account it re-evaluates the performance of entrepreneurial firms in terms of innovation, job creation, economic growth, productivity growth and happiness and well-being to show how both positive and negative interpretations can emerge. This is partly because of the highly skewed nature of performance. To address this, the paper defines a new category of firms – marginal undersized, poor performance enterprises - that can be combined with “gazelles” to allow the single category ‘entrepreneurial firms’ to be split in two. This allows the impact of entrepreneurs – defined here as people who start firms – to be more realistically evaluated as it avoids a composition fallacy that assigns the benefits of entrepreneurship to the average firm.

FINNOV DP8.5890.9 KB