Knowledge that Transforms

Abstract Applying real options logic, we build and test a multilevel model that explicates the influence of a country's intellectual property protection regime on the effect of an individual's human and financial capital on entrepreneurial growth aspirations. The results suggest that the strength of the intellectual property regime moderates negatively the relationship between an individual's education and entrepreneurial growth aspirations; and it moderates positively the relationship between an individual's household income and growth aspirations. Intellectual property protection, thereby, encourages specialization amongst differently qualified entrepreneurs. Our findings support claims that strategic entrepreneurial behaviors cannot be fully understood without giving attention to the context in which those behaviors are observed. Copyright © 2010 Strategic Management Society.

Abstract Knowledge spillovers are known to generate positive benefits for entrepreneurs, but may come at the expense of knowledge creation by the incumbent firms which generate them. This article develops a predator–prey model of knowledge spillovers which captures the interdependence between idea‐creating incumbents and knowledge spillover‐appropriating entrepreneurs. The values of the model's parameters determine whether these two populations of firms settle down in a stable equilibrium; cycle over time with entrepreneurs doing well when incumbents do badly and vice‐versa; or drive each other to extinction. This sheds light on disparate industry life cycle patterns observed in previous research and generates some novel insights relating to public policy. In particular, the model suggests that governments ought to adopt a dynamic policy stance, initially implementing policies which favor incumbents before shifting their intervention efforts toward encouraging entrepreneurs. Copyright © 2010 Strategic Management Society.