Abstract

Understanding processes of economic progress and development has been central to economic theorizing since Adam Smith’s “The Wealth of Nations”. Modern economic analysis, too, focuses on understanding the dynamics of an evolving market economy. In particular, evolutionary approaches have facilitated understanding of how individual, as well as organizational, inventiveness and energy shape the evolution of market economies (Nelson and Winter, 1982). Far from the full rationality assumption of neoclassical economics, these theories have viewed economic agents and organisations as groping and learning by trial-and-error, developing path-dependent knowledge, routines and capabilities, and have thereby led to original contributions to economic theory. The purpose of this paper is to propose evolutionary explanations of entrepreneurial phenomena, by focusing on a path-dependent approach and telling a “process story” of how entrepreneurial choices arise and are made.

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