Entrepreneurial activity does not always lead to economic growth. While improvements have been made to human capital, property rights protection, and access to financial capital in abject poverty contexts with the assumption that they will increase entrepreneurial activity, the results have been mixed. More recently, many entrepreneurs interested in poverty alleviation are crossing borders to engage in initiatives aimed at reducing poverty internationally. These efforts have also had mixed results. This paper posits that one reason is that entrepreneurial opportunities and their wealth creation potential vary, and the impact of exploiting these opportunities on economic growth in poverty contexts can also vary. This paper identifies self–employment opportunities, often exploited in abject poverty, that do not lead to sustainable growth solutions. Alternatively, discovery and creation opportunities while difficult to exploit in poverty contexts hold the greatest potential for significant economic impact.

Abstract Do entrepreneurial opportunities exist, independent of the perceptions of entrepreneurs, just waiting to be discovered? Or, are these opportunities created by the actions of entrepreneurs? Two internally consistent theories of how entrepreneurial opportunities are formed – discovery theory and creation theory – are described. While it will always be possible to describe the formation of a particular opportunity as an example of a discovery or creation process, these two theories do have important implications for the effectiveness of a wide variety of entrepreneurial actions in different contexts. The implications of these theories for seven of these actions are described, along with a discussion of some of the broader theoretical implications of these two theories for the fields of entrepreneurship and strategic management. Copyright © 2007 Strategic Management Society.

This paper examines the relationship between resource-based theory and entrepreneurship and develops insights that advance the boundaries of resource-based theory and begin to address important questions in entrepreneurship. We extend the boundaries of resource-based theory to include the cognitive ability of individual entrepreneurs. Entrepreneurs have individual-specific resources that facilitate the recognition of new opportunities and the assembling of resources for the venture. By focusing on resources, from opportunity recognition to the ability to organize these resources into a firm and then to the creation of heterogeneous outputs through the firm that are superior to the market, we help identify issues that begin to address the distinctive domain of entrepreneurship.

Stephan, Uhlaner, and Stride’s (J Int Bus Stud 46:308–331, 2015) Decade Award-winning paper highlights how formal and informal institutional antecedents shape the emergence of social entrepreneurship across borders, while their 2026 retrospective extended attention to the enduring impact of social ventures. The Reuber and Fischer (J Int Bus Stud, 2026) commentary extended the conversation to emphasize the organizational impact of social ventures. Yet, while the retrospective and Reuber and Fischer’s (J Int Bus Stud, 2026) commentary emphasize how social ventures evolve and generate impact over time, they stop short of fully exploring how entrepreneurial action itself brings institutions and stakeholders into being. This commentary builds on the award-winning paper, the retrospective, and Reuber and Fischer’s commentary, while drawing on Creation Theory (Alvarez and Barney in Strateg Entrep J 1:11–26, 2007; Alvarez and Sachs in Acad Manag Rev 48:187–202, 2023) to reframe social entrepreneurship as a generative process in which opportunities, institutions, and stakeholders emerge together through cycles of action, interpretation, and shared experience under conditions of uncertainty. This perspective shows how entrepreneurs and stakeholders not only adapt to institutional environments but also actively create and reconfigure them. This reframing opens new directions: examining how entrepreneurial processes generate novel institutional forms across borders, how stakeholder roles are negotiated and renegotiated across cultural contexts, and how social ventures reshape the very landscapes in which they operate.

The creation of entrepreneurial rents occurs under conditions of uncertainty. Yet current theories of rent appropriation such as transactions cost theories of the firm focus their efforts primarily on how quasi-rents – rents that have already been created – are appropriated by parties to that exchange. Entrepreneurs face a dual challenge, that of creating entrepreneurial rents and appropriating some of these rents. Moreover, this challenge usually exists at a time when the entrepreneurial rents that might be created are not known or anticipatable. Indeed, entrepreneurs not only concern themselves with ensuring that they are able to appropriate at least some of the rents that might be eventually created but in fact they may not create any rents or potentially lose value. Understanding the dual nature of the rent creation and the rent appropriation problem has a variety of implications for the study of entrepreneurial organizations and generally for theory of the firm discussions.

Stakeholders self-identify with a firm when they believe they affect and are themselves affected by the actions of a firm. When a firm is already operating, is already implementing a business model, and is already engaging in actions that are more or less consistent with that business model, stakeholders can evaluate whether they are affected or they affect the firm. However, how do stakeholders self-identify in the earliest stages of an entrepreneurial endeavor when a firm has yet to exist and the outcomes of product and service ideas and their effects on stakeholders are unknown? The purpose of this paper is to develop a process model that explains how individuals come to self-identify as stakeholders using the theory of common ground as a foundation (Clark, 1996). Common ground, a theory from the field of linguistics explains how human cooperation emerges and sheds light on how stakeholder self-identification can lead to the emergence of new language, an entrepreneurial endeavor, and product and service ideas. Finally, the paper proposes that how this endeavor is organized is a manifestation of the unique process the stakeholders have gone through.

This paper suggests that founders often use firm formation to exploit opportunities and must sometimes make organizing decisions about the allocation of control before the economic value of the opportunity can reliably be known even probabilistically. Motivated by questions surroundings such settings, we use incomplete contract theory and apply a Bayesian learning model to the allocation process of ownership control rights of founders in emerging firms. This model examines how founders learn and build on their prior beliefs, enabling them to allocate and change ownership control rights under differing conditions of risk and uncertainty.