Taking the Entrepreneur out of Entrepreneurship

18 Pages Posted: 22 Jun 2021

See all articles by Alex Coad

Alex Coad

Waseda University

David Storey

University of Sussex - School of Business, Management and Economics

Date Written: December 1, 2020

Abstract

This ‘Debate Essay’ responds to the extensive overview of research on new venture survival provided by Soto-Simeone et al. (2020). The material they reviewed exclusively emphasised the link between the talents, skills, awareness of the business owner and new venture outcomes. Our case is that such a review is incomplete, even misleading, because it omits the key concept of “chance,” and all references to the stream of literature demonstrating that new venture performance is best explained by the gambling analogy. We therefore set out the Gambler’s Ruin Model in which new venture performance is a random walk and exit depends on access to financial resources – chips. This model takes the entrepreneur out of entrepreneurship.

Keywords: New firm growth and survival, Gambler’s Ruin, Random Walk, Fooled by randomness

JEL Classification: L26, L25

Suggested Citation

Coad, Alex and Storey, David, Taking the Entrepreneur out of Entrepreneurship (December 1, 2020). Available at SSRN: https://ssrn.com/abstract=3865618 or http://dx.doi.org/10.2139/ssrn.3865618

Alex Coad (Contact Author)

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

David Storey

University of Sussex - School of Business, Management and Economics ( email )

Falmer, Brighton BN1 9SL
United Kingdom

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