Resources, capabilities and entrepreneurial perceptions

We develop a subjectivist theory of entrepreneurship that focuses on individuals, their knowledge, resources and skills, and the processes of discovery and creativity, which constitute the heart of entrepreneurship. First, we establish the fundamental importance of subjectivity in entrepreneurial discovery and creativity that lead to economic change and to influencing organizational learning. Second, we build on Penrose (1959) to elaborate how entrepreneurs ’ perceptions and personal knowledge shape a firm’s subjective productive opportunity set. Third, we explain that entrepreneurial perceptions partly originate from entrepreneurs ’ experiences in specific business settings such as the firm, the management team, and the industry. Fourth, we highlight the theoretical causal connections between subjectivity in entrepreneurship and observed heterogeneity in firm−level economic performance. Lastly, we suggest directions for further advancing a subjectivist resource−based approach to future entrepreneurship research. We thank Rajshree Agarwal, Sharon Alvarez, and Elaine Mosakowski for their comments on earlier versions of this paper. The usual disclaimer applies