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To date, the phenomenon of entrepreneurship has lacked a conceptual framework. In this note we draw upon previous research conducted in the different social science disciplines and applied fields of business to create a conceptual framework for the field. With this framework we explain a set of empirical phenomena and predict a set of outcomes not explained or predicted by conceptual frameworks already in existence in other fields.
For a field of social science to have usefulness, it must have a conceptual framework that explains and predicts a set of empirical phenomena not explained or predicted by conceptual frameworks already in existence in other fields. To date, the phenomenon of entrepreneurship has lacked such a conceptual framework. Rather than explaining and predicting a unique set of empirical phenomena, entrepreneurship has become a broad label under which a hodgepodge of research is housed. What appears to constitute entrepreneurship research today is some aspect of the setting (e.g., small businesses or new firms), rather than a unique conceptual domain. As a result, many people have had trouble identifying the distinctive contribution of the field to the broader domain of business studies, undermining the field's legitimacy. Researchers in other fields ask why entrepreneurship research is necessary if it does not explain or predict empirical phenomena beyond what is known from work in other fields. Moreover, the lack of a conceptual framework has precluded the development of an understanding of many important phenomena not adequately explained by other fields.
One example of this problem is the focus in the entrepreneurship literature on the relative performance of individuals or firms in the context of small or new businesses. Since strategic management scholars examine the differences in and sustainability of relative performance between competitive firms, this approach is not unique (Venkataraman, 1997). Moreover, the approach does not provide an adequate test of entrepreneurship, since entrepreneurship is concerned with the discovery and exploitation of profitable opportunities. A performance advantage over other firms is not a sufficient measure of entrepreneurial performance, because a performance advantage may be insufficient to compensate for the opportunity cost of other alternatives, a liquidity premium for time and capital, and a premium for uncertainty bearing. Therefore, although a conceptual framework to explain and predict relative performance between...