ABSTRACT
The study of entrepreneurship offers a paradox. 1 On one side it is claimed that the emergence of entrepreneurship depends on a hospitable environment provided by private property rights, and liability laws (supported by legislation and state enforcement), as well as free trade, competition, and factor mobility. This is the static view that invites cross-country comparisons (Whitley 1990; 1999). In most of the literature it is implicitly assumed that functioning capital markets exist or private property rights are enforced, leaving the impression that entrepreneurship is a phenomenon of the developed, industrialized world. On the other hand it is argued that without entrepreneurs constantly exploring new ways to fight off scarcity of resources, or political constraints that inhibit voluntary exchange, functioning markets would not emerge. Such a dynamic view has for a long time been the domain of economic history, recently followed by the management science literature (Nelson 1995; Nooteboom 2000, O'sullivan 2000; Shane and Venkataraman 2000). This state of affairs has changed in the last twenty years. First, new approaches that can be broadly summarized as New Institutional Economics, evolutionary economics, and organizational ecology provided the tools by which the interdependency between institutional/organizational structures and the appearance/disappearance of firms, industries, and even business systems can be analysed (Williamson 1993a; North 1984; Nelson 1996; Carroll and Teece 1999; Carroll and Hannan 2000; Hannan and Freeman 1984; 1989). Second, internationalization and the collapse of socialism helped to remind us that without new entrepreneurs, new firms and a new private business sector there would be no ‘transformation’ of emerging markets and transition economies.
