• ISSN: 2155-7950
  • Journal of Business and Economics

Entrepreneurial Orientation, Social Capital and Firm Creation

for Nascent Entrepreneurs

Edwin L. Knox1, Nathan K. Austin2, Chinyere Emmanuel Egbe1
(1. Division of Business, Essex County College, USA; 2. Marketing Department, Morgan State University, USA)
Abstract: Prior research on entrepreneurship has identified social, demographic and economic variables that contribute to an individual propensity to engage in entrepreneurial activities (Fairlie, 2005). In this paper, we propose to study the relationship between Entrepreneurial Orientation (EO) and Entrepreneurial Firm Creation (FC) of the Nascent Entrepreneurs. We argue that Entrepreneurial Orientation in and of itself will not lead to Firm Creation. We posit that the Nascent Entrepreneur (NE) takes calculated risks, as clearly indicated in the literature. This paper goes beyond the extant literature and examines the individuals who enter business as an independent agent. We also assess the role of social capital (SC) in the relationship between Entrepreneurial Orientation and firm creation. Using a logistic regression model and interaction analyses, it appears that Entrepreneurial Orientation by itself is not sufficient to lead to Firm Creation. Market Intelligence Gathering (MIG) continues to be a critical variable. Our results clearly indicate that the Nascent Entrepreneur takes a calculated risk. We also find moderating or potentially mediating effects of other variables on the process of firm creation.
Key words: firm creation, entrepreneurship, nascent entrepreneur, entrepreneurial orientation, social capital,
relational capital, market intelligence gathering, cognitive capital
JEL codes: M130, L26

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