Knowledge that Transforms

Despite considerable scholarly attention to uncertainty management in entrepreneurship, it remains unclear how entrepreneurs' perceived environmental uncertainty shapes entrepreneurial actions, such as innovation actions, in their firms. A positive view interprets innovation as a promising approach to uncertainty management, thus suggesting a positive effect; while a negative view sees uncertainty as an obstacle to innovation, thereby proposing a negative effect. We reconcile this tension based on the typology of perceived environmental uncertainty (PEU)—i.e., state, effect, and response uncertainty, which respectively focus on the nature of environmental changes, the consequences of any changes for focal firms, and the availability or effectiveness of potential responses. We posit that state and effect uncertainty perceived by entrepreneurs encourages innovation actions, whereby the positive influence of state uncertainty is stronger than that of effect uncertainty. In contrast, we expect response uncertainty perceived by entrepreneurs to discourage innovation actions. Using hand-collected multiple-wave multiple-informant survey data on 146 small firms in Malaysia, we show evidence for most of our arguments. Our study disentangles the distinct impacts of three types of perceived uncertainty, thereby advancing a more fine-grained understanding of when perceived uncertainty catalyzes or paralyzes entrepreneurial action.

How do entrepreneurs act on their beliefs when probabilities of outcomes are unknown but subjectively perceived? We theorize that two distinct dimensions of ambiguity attitudes influence entrepreneurial action: ambiguity aversion - the unwillingness to bear ambiguity - and ambiguity sensitivity - how individuals discriminate between different levels of perceived chances of success. The second dimension determines how much entrepreneurs adjust their actions based on new information - a distinct aspect that cannot be captured by ambiguity aversion alone. Our theory suggests that entrepreneurs with different growth orientations have different ambiguity attitudes as compared to employees. Using incentivized measures from a large-scale survey, we find that incorporated entrepreneurs exhibit lower ambiguity aversion than employees, indicating that they are more willing to act under ambiguity. Distinctively, unincorporated self-employed individuals show higher ambiguity sensitivity, indicating that their actions are more responsive to changes in their beliefs. These patterns persist after controlling for risk attitudes, optimism, cognitive ability, and demographics. Our results highlight the distinct impacts of ambiguity aversion and ambiguity sensitivity on entrepreneurial actions.

How do changes in property rights shape individual entrepreneurship in weak institutional settings? Although secure property rights are widely viewed as essential to entrepreneurial action, most research treats them as static arrangements rather than evolving institutions. As a result, we know little about how property rights reforms influence individuals' decisions to engage in entrepreneurship, or how these effects vary across social and institutional contexts. We address this gap by examining China's 2014–2018 agricultural land titling program, which formalized land use rights through a quasi-natural experiment. Using individual-level survey data and a staggered difference-in-differences design, we find that land titling increases farmers' likelihood of entering self-employment, especially among marginalized groups and in regions with stronger complementary institutions. These findings highlight the dynamic nature of property rights, showing how institutional reforms allow individuals to reassess uncertainty and realign incentives in ways that motivate entrepreneurial action. Executive summary This paper investigates how institutional reforms to property rights influence individual decisions to pursue entrepreneurship in contexts of weak institutions and deep social stratification. Although secure property rights are widely recognized as foundational to entrepreneurial activity, existing research has largely focused on macroeconomic outcomes or treated the connection as conceptual or assumed. We address this gap by leveraging a rare quasi-natural experiment: China's 2014–2018 agricultural land titling program, which clarified and formalized land use rights across the countryside through a centrally mandated, GPS-based registration process. Drawing on a nationally representative individual-level panel survey and using a staggered difference-in-differences design, we find that land titling significantly increases the likelihood that farmers transition into self-employment. Importantly, this effect is not equally distributed across the population. The reform has a particularly strong impact among individuals from marginalized social groups—those with rural hukou, no Party membership, or outsider status in village lineage structures—who had previously been disadvantaged in informal institutional systems. We theorize that for these individuals, land titling reduced uncertainty, unlocked dormant asset value, and, crucially, made entrepreneurship a more credible and accessible path. In contrast, more privileged individuals experienced smaller shifts in motivation, having already been able to navigate informal channels of influence and protection. We also find that the reform's impact is amplified in regions with more developed market institutions, underscoring the importance of institutional complementarity in enabling reform outcomes. Theoretically, the paper integrates insights from property rights theory and stratification research to explain how institutional reforms activate entrepreneurial behavior not only by shifting incentives, but by altering perceived opportunity structures in stratified environments. Rather than treating institutional change as uniformly enabling, we show how entrepreneurial responses are shaped by social positioning and local institutional capacity. In doing so, the study contributes to entrepreneurship research by offering direct, individual-level causal evidence on how and for whom property rights reforms matter. It advances the behavioral foundations of institutional theory and offers practical implications for inclusive policy design in emerging economies.

Entrepreneurship theory has often posited the founder as the central agent of venture creation; from identifying opportunities, to mobilizing resources, and driving execution. We examine how venture studios – organizations that systematically create new ventures by taking over traditionally founder-led processes – challenge this assumption. Drawing on an inductive multiple case study of 16 venture studios with 50 primary and secondary interviews, we reveal how venture studios develop and validate ideas independently from founders prior to recruiting them, and how they coordinate the entrepreneurial process when these functions are separated. Our findings contribute to the literature on the individual-opportunity nexus, the entrepreneurial process and open the research agenda on venture studios as a new phenomenon in entrepreneurship. • Venture studios challenge the assumption that founder and idea are connected. • We provide qualitative evidence from 16 venture studios using 50 interviews. • Venture studios disentangle opportunity discovery from venture creation. • They coordinate the entrepreneurial process through managerial mechanisms. • Venture studios shift entrepreneurial agency from individual to the organization.

When venture capital (VC) investment flows into a local economy, does it yield economic activity beyond the receiving ventures? While a large literature studies the effect of VC investments on venture-level activity, its consequences for broader economic activity are less well understood. We study the effect of VC investment flows on destination county employment, wages, and venture creation, using a novel instrument based on the ‘social connectedness’ of counties to major non-local sources of VC investment. Using detailed data on investor-to-venture VC flows, we find substantial positive effects: using instrumental-variable estimates, each million dollars invested into a county yields approximately one new venture, 41 jobs, and seven million dollars in payroll. We also document positive spillovers across industries, particularly toward those supplying VC-backed ventures—thereby contributing to the resource munificence of the local economy and its entrepreneurial ecosystem. • We study effects of VC flows across the US on destination-county economic activity. • We combine FE with a novel IV: social connectedness to major non-local sources of VC. • Each million $ invested yields at least 1 venture, 41 jobs, and 7 mln $ in payroll. • Effects spread beyond VC-receiving ventures to other industries through spillovers. • Supplier services benefit, helping to grow the local entrepreneurial ecosystem.