Entrepreneurship trajectories: investigating the development of dynamic capabilities and the trend of random inefficiency by designing country-specific prescriptive models

Abstract

Stemming from the principles of economics, different models can be used to tackle entrepreneurship trajectories. Scholars offer normative models that rebuild the different stages entrepreneurs go through; entrepreneurs rely on heuristics (prescriptive models) to improve judgments (descriptive models) and get general norms (normative models). Rather, this has resulted in inconsistency between theory and practice in entrepreneurship. The objective of this paper is to try to reduce this inconsistency. For this purpose, a literature review is carried out. Normative models are evaluated to ascertain if they can be descriptive models, with stages and variables to test. Since Bygrave’s model contains several stages and the highest number of variables (forty-two), it is selected and tested through stochastic frontier analyses. Data about the USA, Germany, and India (three very different countries where entrepreneurship is a vibrant phenomenon) from 2012 to 2018 are retrieved from the Global Entrepreneurship Monitor website. Statistical elaborations reveal the same trend of random inefficiency but different developments of dynamic capabilities. Thus, specific entrepreneurship trajectories are figured out. Overall, this paper corroborates a processual view of entrepreneurship capable of embracing theory and practice and adding practical issues in areas where theory shows that they are still lacking.