WHY ENTREPRENEURS CHOOSE RISKY R&D PROJECTS - BUT STILL NOT RISKY ENOUGH

• Type: Article in International Scientific Journal
• Date: 2017

Authors

Damsgaard, EF (Author) Other; Hjertstrand, P (Author) Other; Norback, PJ (Author) Other; Persson, L (Author) Other; Helder Vasconcelos (Author) FEP

Journal

Title: Economic Journal

Vol. 127

Pages: F164-F199

ISSN: 0013-0133

Publisher: Wiley-Blackwell

Indexing

ISI Web of Knowledge - 12 Citations

Scopus - 14 Citations

Other information

Authenticus ID: P-00N-60R

DOI: 10.1111/ecoj.12470

Abstract (EN): This article examines how entrepreneurs and incumbents differ in their R&D strategies. We show that entrepreneurs have incentives to choose projects with a higher risk and a higher potential in order to reduce expected entry costs. If products are not too differentiated, entrepreneurs will select projects that are too safe from a social point of view, since they do not internalise the business stealing effect on incumbents. Entry support induces entrepreneurs to choose safer projects, whereas R&D support encourages entrepreneurship without affecting the type of entrepreneurship.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 36