The Impact Of Market Intelligence Generation,Social Capital, And Entrepreneurial Orientation On Firm Creation: A Focus On Nascent Entrepreneurs

Abstract

New firms formed by entrepreneurs produce nearly half of all new product and service innovations; are the source of creation for at least half of all net new jobs; and are responsible for a major share of increases in sector productivity. Currently in America, there are approximately between12 million and 20 million "nascent entrepreneurs," i.e. those who are engaged in activities to start a new firm, but have not yet formally establish an operating business. Unfortunately, less than 10% of these nascent entrepreneurs will actually create an operational firm. This study developed a model that used a multi-construct framework to explore the roles of a nascent entrepreneur's market intelligence generation (MIG), entrepreneurial orientation (EO) and social capital (SC) in explaining firm creation (FC). The MIG represents the pre-disposition toward the collection of market information pertaining to current and potential customer needs, and preferences; scanning and analyzing environmental factors that may influence customers' needs and want; analyzing competitors' actions and how they might influence customers' needs and preferences; gathering and monitoring marketing intelligence via formal and informal methods. EO refers to the processes, practices and decision-making activities used by entrepreneurs that lead to the initiation of an entrepreneurial firm, including experimenting with promising new technologies, being willing to seize new product-market opportunities, and having a pre-disposition to undertake risky ventures. SC refers the nascent entrepreneur's network structure of embedded relationships (e.g., family, friends, entrepreneurs, and business professionals) that can provide information as well as other resources (e.g. information, capital, customers, and labor) necessary to create a firm. The study sample population is from a national dataset developed specifically for research on nascent entrepreneurs (PSED II). A series of logistic regression analyses were conducted to test hypothesized relationships. The results provide support that MIG, EO and several dimensions of SC do play a role in FC. The findings of the study contribute specifically to the literatures of MO and EO by extending the constructs into the analysis of nascent