Extending the Economic Foundations of Entrepreneurship Research

• Date: 01 June 2018
• Published date: 01 June 2018
• DOI: http://doi.org/10.1111/emre.12158
• Author: Matthew McCaffrey

Extending the Economic Foundations of

Entrepreneurship Research

MATTHEW MCCAFFREY

Alliance Manchester Business School, University of Manchester, Manchester, UK

As the entrepreneurship discipline grows, it increasingly faces unique research challenges. Recently,‘interactive,

activity based, cognitively hot, compassionate, and prosocial’approaches to the study of entrepreneurship have

arisen to meet these challenges. This paper builds on recent discussions by emphasizing, in addition, the

persistent value of economic foundations for a progressive research agenda in entrepreneurship. A realist

economic perspective is both fundamental for entrepreneurship and complements newer research trends. It has

also stood the test of time: economic questions relating to methodological individualism, uncertainty, judgment,

opportunities, social motivations, and incentives have not only set the tone for past research, but continue to offer

starting points and insights for contemporary work. This paper thus makes two contributions: first, it explains the

relevance of each of these concepts for contemporary work in entrepreneurship studies, and second, it uses them

to pose novel research questions. These questions complement the abovementioned emerging trends in

entrepreneurship.

Keywords: economics; methodological individualism; uncertainty; judgment; opportunities; social enterprise;

incentives

Introduction

As the entrepreneurship discipline grows, it increasingly

faces unique research challenges. In order to meet them,

the literature proposes new perspectives and further

research questions. For example, Dean Shepherd’s

(2015) article ‘Party on!’outlines an ambitious research

program for entr epreneurship stud ies that speaks t o its

special expertise as well as its special problems.

Shepherd’s proposals are based on a simple claim: if

entrepreneurship is to continue to thrive, it must remain

open to new research questions, theories, and methods,

and must be willing to shift its boundaries. This means

not only generating fresh ideas within the discipline,

but also reaching outside it to the sciences and

humanities for inspiration. For example, psychology

currently plays a prominent role in entrepreneurship,

but there are many additional fields of inquiry worth

exploring as well. More specifically, Shepherd (2015,

p. 489) argues that work on ‘interactive, activity based,

cognitively hot, compassionate, and prosocial’topics

will do the most to help the discipline grow and evolve

in the coming years. The expanding influence of these

approaches is unquestionable. Research relying on them

has already proven the ability to add new insight to the

literature, and there is every likelihood it will continue

to do so. However, while emerging trends do offer

essential guida nce for the future of entre preneurship,

there is also much inspiration to be had by reflecting

on the origins and fundamental questions of the

discipline.

With this reflection in mind, I argue two major points:

first, economic questions, concepts, and perspectives are

vital drivers of new work in entrepreneurship, and offer

substantial value-added to researchers of all backgrounds.

Second, in addition to being useful in their own right,

economic theories complement the specific paths that

Shepherd outlines. To show this, I pose a number of

original research questions that extend a realist economic

analysis of entrepreneurship, and link them to emerging

research trends. My goal is not to propose a replacement

for these trends, but to emphasize a complementary

agenda focusing on a fundamentals-based, inter-

disciplinary understanding of the entrepreneurial process.

I doubt many entrepreneurship scholars would dismiss

economic issues as unimportant, so my objective is to

show how they already underpin and expand on the kind

of trends Shepherd identifies. I suggest that some

economic perspectives or questions are inevitable in

entrepreneurship research, and deserve persistent

attention. I hope to convince researchers that a successful,

Correspondence: Matthew McCaffrey, 5.14A Roscoe Building, Oxford

Road, Manchester, UK,Tel: +44 (0) 161 275 5951. E-mail: matthew.

mccaffrey@mbs.ac.uk

European Management Review, Vol. 15, 191–199, (2018)

DOI: 10.1111/emre.12158

©2017 European Academy of Management