Contrasting Entrepreneurial Economic Development in Emerging Latin American Economies: Applications and Extensions of Resource-Based Theory

Abstract

Emerging economies face daunting economic development challenges. Economists and management consultants have generally suggested global solutions that typically focus solely on foreign direct investment. Yet a resource-based theory approach offers an alternative view of economic development in which a foundation of resources within a region gestates entrepreneurial activity. While theoretically appealing, it is unclear in application how such resources can be developed or which types of resources are most important to develop. This paper extends the application of resource-based theory to entrepreneurial economic development in subsistence economies. A qualitative study of contrasting entrepreneurial activity in Chiapas (Mexico) and Atenas (Costa Rica) highlights the primacy of intangible resources-and especially entrepreneurial orientation resources-in the gestation of entrepreneurial activity.

Engineers as Entrepreneurs: Entrepreneurial Orientation of Engineers in South Africa

“…This is supported by West et al [25], citing Malecki (1997) and Wiklund & Shepherd (2003), who suggest that knowledge resources are complex and encompass the 'know-how' and the 'know-what' related to a specific skill that is needed to identify opportunities in a specific market. Furthermore, West et al [25], citing Wright et al (1997), affirm that the 'know-how' and 'know-what' are related to markets and innovation capabilities, which are dimensions of starting up new ventures. West et al [25] add that technological resources that encompass intellectual property rights have become important to entrepreneurship.…”

“…Emerging economies such as that of South Africa face daunting economic development challenges [25]. The positive relationship between entrepreneurship and economic growth, particularly in developed economies, is well documented.…”

“…Building on this, Baron [2] and Aloulou & Fayolle [1] have suggested that some entrepreneurs' activities include identifying the resources necessary to develop ideas to launch new products and services. A review of the study by West et al [25], citing Green & Brown (1997), suggests that, in line with resource-based theory, five resources -human, social, physical, organisational, and financial -need to be acquired to enable entrepreneurship. Knowledge or intellectual property components of the five resources have been identified as the most critical for new entrepreneurial ventures.…”

“…Domke-Damonte et al [6] cite Grant & Bush (1995) and West et al [25], who claim that EO provides insight into the predispositions that an individual may carry into a business setting. These authors explain that EO provides an indicator of the requisite behavioural initiatives that are conducive to new-venture development.…”

“…Aloulou & Fayolle [1] agree that entrepreneurial ventures are an engine of change and growth for any economy, and that the entrepreneurial attitude fuels them. As a result of the understanding of the correlation between entrepreneurship and economic growth, West et al [25] (citing Acs, Birch, Kirchhoff & Phillips, Romer) argue that entrepreneurial development is seen by many governments as a gateway to economic vitality, enhancing the prospects for self-generating innovation and future growth, and yielding qualitative improvements to an area's social and economic fabric.…”