Knowledge Spillover
Entrepreneurship and Innovation
in Large and Small Firms
David B. Audretsch
Introduction
Where do new opportunities come from and what is the response of decision makers
when confronted by such new opportunities? The disparate approaches pursued
to answer these questions distinguish the literature on entrepreneurship from that
on firm innovation. The model of the knowledge production function of the firm
has assumed the firm to be exogenous, while opportunities are endogenously
created through purposeful investments in the creation of new knowledge, such as
expenditures on research and development and augmentation of human capital.
By contrast, in the entrepreneurship literature the opportunities are generally
viewed as exogenous, but the startup of the new firm is endogenous to characteristics
specific to the individual. The focus of the entrepreneurship literature in general,
and entrepreneurship theory in particular, has been on the cognitive process
by which individuals recognize entre
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