File(s) under embargo

Reason: Publisher requirement.

1

year(s)

3

month(s)

22

day(s)

until file(s) become available

Information frictions and entrepreneurship

journal contribution
posted on 28.09.2020, 08:51 by Deepak Hegde, Justin Tumlinson
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.

History

School

  • Loughborough University London

Published in

Strategic Management Journal

Volume

42

Issue

3

Pages

491 - 528

Publisher

Wiley

Version

AM (Accepted Manuscript)

Rights holder

© Strategic Management Society

Publisher statement

This is the peer reviewed version of the following article: HEGDE, D. and TUMLINSON, J., 2021. Information frictions and entrepreneurship. Strategic Management Journal, 42 (3), pp.491-528, which has been published in final form at https://doi.org/10.1002/smj.3242. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.

Acceptance date

18/08/2020

Publication date

2020-10-14

Copyright date

2020

ISSN

0143-2095

eISSN

1097-0266

Language

en

Depositor

Dr Justin Tumlinson. Deposit date: 10 September 2020

Usage metrics

Read the paper on the publisher website

Loughborough Publications

Categories

Exports